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ANNUAL REPORTTRADE AND INVESTMENT LIMPOPO
MARCH - NOVEMBER 2012Johannesburg
Second FloorSandton Office TowersSandton City ComplexCnr 5th Street & Rivonia RoadSandton, 2196JohannesburgSouth Africa
Tel: +27 (011) 026 9576Fax: +27 (011) 783 4076
ISBN: 978-0-621-41083-9
Corporate InformationHead Office
130A Marshall Street PO Box 3490Polokwane PolokwaneLimpopo Province Limpopo ProvinceSouth Africa South Africa0700 0700
Tel: +27 (0)15 295 5171Fax: +27 (0)15 295 5187
www.til.co.za
RP: 218/2013
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Trade and Investment Limpopo Annual Report March - November 2012 Design, layout and print by Xisiwana (PTY) Ltd
Trade and Investment Limpopo Annual Report March - November 2012 1
Contents2 Advantages of Investing in Limpopo3 Organisational Structure4 Board,ExecutiveandCorporateProfile10 MEC’s Foreword12 Chairman’s Foreword14 CEO’s Foreword16 CEO’sOffice19 Research and Knowledge Management Division28 Mining and Green Economy Division35 Business Services Division40 Agriculture and Tourism Division42 Corporate Marketing & Communications Division45 Corporate Services Division53 Financial Statements104 Corporate Information
Trade and Investment Limpopo Annual Report March - November 2012 32 Trade and Investment Limpopo Annual Report March - November 2012
• AccesstoAfrica’smarkets
• Developedinfrastructurecon-nectingLimpopo,theentireSADCregionandtheworld
• Excellentinvestmentopportuni-tiesandabusiness-friendlyenvironment
• Top-classtelecommunicationssystems
• Welldevelopedtradesupportservices
• Transparentandfairtrading
• Governmentpoliciesthatensurepoliticalandeconomicstability
• Competitiveinvestmentincentives
• Skilledandsemi-skilledlabourforce
• Qualityoflife
IN LIMPOPO
ADVANTAGES OF INVESTING ORGANISATIONAL STRUCTURE
BOARD OF DIRECTORS
CHIEF EXECUTIVE
COMPANY SECRETARY
CEO’S OFFICE
STAKEHOLDERMANGEMENT
STRATEGICPARTNER-
SHIPS
LEGAL
RISK MANAGEMENT
REGIONALECONOMIC
INTERGRATION
AGRICULTUREAND TOURISM
AGRIBUISNESS
TOURISM
TRADE ANDINVESTMENT
MINING
GREENECONOMY
BUSINESSSERVICES
AFTER CARESERVICES
MUNICIPALPARTNER-
SHIPS
CORPORATESERVICES
FINANCE
ADMINISTRA-TION
HUMANRESOURCES
INFORMATIONTECHNOLOGY
SUPPLY CHAINMANAGEMENT
CORPORATEMARKETING AND
COMMUNICA-TIONS
RESEARCH ANDKNOWLEDGE
MANANGEMENT
RESEARCH
KNOWLEDGEMANAGEMENT
CORPORATE MARKETING
CORPORATECOMMUNICA-
TIONS
Trade and Investment Limpopo Annual Report March - November 2012 54 Trade and Investment Limpopo Annual Report March - November 2012
CORPORATE PROFILE
Mission
Promotion of Limpopo as the preferred trade and investment location, by marketing of its competitive advantages.
Vision
Limpopo, the major destination for trade and in-vestment thus creating a better life for all.
Values
• Integrity• Professionalism• Botho• Transparency• BathoPele• Partnerships• Excellence• Innovation
FiveUndertakings
• Thatwearecommittedtotheidealof creating a better life for the people of Limpopo through the TIL mandate;• ThatweagreewiththevaluesofBatho Pele(peoplefirst);• Thatwearecommittedtosoaringtogether to greater heights of accomplishments, delivery and service;
• Thatwetogetherwillcreatea‘Trust Organisation’ – an organisation that delivers value to its customers and to its shareholders with integrity; and• ThatweareafamilyofGiraffesandAnts; we envisage the future and work together as a team.
StrategicObjectives
• Seek increased added-value from existing and new projects;
• Increase the Limpopo added-value content of exported products;
• Create sustainable new jobs and maintain existing jobs;
• Increase equity and Broad-based Black Eco-nomicEmpowerment(B-BBEE);
• Create a competitive environment in Limpopo through improved capacity and by removing obstacles to competitiveness, and
• Make TIL the most effective learning organisa-tion in Limpopo through knowledge manage-ment and sharing
SECTORS AND ACTIVITIES
INVESTMENT
Sector Investors/Projects OpportunitiesAgriculture • ZZ2 tomato producers
• Sapikoe tea plantation• Tshivhase AgriDam• Willards• McCain• Giant Foods• Miami Canners
• Considerable investment opportunities in processing and packaging of fruits, vegetables and nuts, as well as red and white meat, chicken eggs and furniture
• Additionalproductionofsunflowers,soyabeansandmaize under the dry-land conditions
• Greenhouse productions of various agricultural pro-duce
• Cultivation of fruit and vegetablesManufacturing and services
• Silicon smelters• Anglo Platinum• Eskom• Granor Passi• Bonanza• Kanhym
• Manufacturing of jewelery • Furniture and industrial chemicals• Rendering the light to medium-sized engineering ser-
vices• Manufacturing and utilisation of magnesium oxide, ce-
ment, lime-based products and graniteMining Sector • Anglo Platinum
• Invensil• Foskor• DeBeers(Venetia)• Exxaro• Impala Platinum• Xstrata• Rio Tinto• Lonmin
• Manufacturing and supply of tools, uniforms, machin-ery and plant equipment
• Beneficiationandtransformationofplatinumandothermetals into various other products
• Small-scale mining• Base metals smelting• Diamond cutting
Tourism • Xhakadzi Safari Lodge• Kondowe Conservancy• Mabosego Game Farm• Ga-molekwa• Salt Lake Conservancy• Mining theme parks
• Opportunities for development of nature-based tourism with strong appeal to international tourists
• Potential for investment in terms of ownership, man-agement and concessionary activity
• Opportunities for independent hospitality providers• Tourism, family recreation
Green Economy • Renewable energy• Recycling
Trade and Investment Limpopo Annual Report March - November 2012 76 Trade and Investment Limpopo Annual Report March - November 2012
Africa and the World
GATEWAY TO AFRICA
ANEMERGINGAFRICANHUB
Limpopo is upgrading Polokwane International Airport, enabling it to handle the biggest, fully laden aircraft and to develop into a major cargo hub serving sub-Saharan markets and Europe. In addition, Limpopo is planning to de-velopanIndustrialDevelopmentZone(IDZ)aroundtheairport,creatingopportunitiesforexporterswhoaddvalueto the province’s raw materials.
The upgrading of Maputo port in neighbouring Mozambique means that Limpopo-based exporters and importers canusethefacilitywithgrowingconfidence.MaputoismuchclosertoLimpopoascomparedtootherportswherecongestion often hampers trade. Limpopo exporters estimate they will save about one-third of their transportation costs by using the facility.
Linked to Limpopo road and rail, Maputo is situated between 300 and 400 kilometres from the rail mining and ag-ricultural centres of Limpopo.
APPROACHTOMARKET
• Outwardsellingmissions-topromoteLimpopovalue-addedproductsandcommoditiesintothe international markets;• Inwardbuyingmissions-topromoteLimpopovalue-addedproductsandcommoditiesintothe international markets; and • Exhibitions–locally,nationallyandinternationally-topromoteLimpopovalue-addedproductsand commodities.
GATEWAY TO AFRICA
SOUTHAFRICA’STOP10EXPORTDESTINATIONS
• India• China• Taiwan/ Chinese Taipei• Netherlands• Japan• United States of America• Germany• Zimbabwe• Italy• United Kingdom
SOUTHAFRICA’STOP10COUNTRIESOFIMPORTORIGIN
• Canada• United Arab Emirates• Togo• Zimbabwe• Congo, DRC• India• Saudi Arabia• China• Kuwait• Zambia•
EXPORTPRODUCTSANDSECTORS
• Animalby-products• Art• Beverages• Clothing• Fertiliser• Foodandby-products• Fruitornutpurees• Sauces,mixedcondiments and seasonings• Mustardflour• Starch• Sugarsubstances• Sugarconfectionary• Sweeteningsubstances• Fruit,nutsandotherediblepartsofplants, prepared or preserved• Driedfruit• Freshfruit• Furniture• Glassandby-products• Glue• Industrial/building/electricaltools, equipment and materials• Mining• Motorindustry• Oils• Packaging• Paperandby-products• Plasticandby-products
PROVINCE’SEXPORTDESTINATIONS
• European,EasternEurope, Russian Federation• UnitedKingdom• Scandinaviancountries• AfricaandtheMiddleEast• NorthAmerica• Australasia:Australia,China, Hong Kong, India, Indonesia, Japan, Korea, Republic of Malaysia, Singapore, Sri Lanka, Taiwan, Thailand, New Zealand• CentralAmerican• SouthAmerica
Trade and Investment Limpopo Annual Report March - November 2012 98 Trade and Investment Limpopo Annual Report March - November 2012
1 6
2
1. Muthuhadini Madzivhandila 2. Hawa Bibi Khan 3. Modipadi Moganedi 4. Themba Mhlaba
[Chairperson] [Deputy Chair] [Board Member] [Board Member]
MEMBERS OF THE BOARD
7
3 4 5
98
5. David Simelane 6. Makano Mosidi 7. Republic Monakedi 8. Mokgadi Virgin Mthema 9. Chris Luvhani
[Board Member] [Board Member] [Board Member] [Board Member] [Board Member]
Trade and Investment Limpopo Annual Report March - November 2012 1110 Trade and Investment Limpopo Annual Report March - November 2012
EXECUTIVE MANAGEMENT
PINKY KEKANAMEC
I am pleased to report that the amalgamation of LEDETagencies:Tradeand InvestmentLimpopo,Limpopo Business Support Agency, Limpopo Ag-ricultural Development Agency into Limpopo Eco-nomic Development Enterprise will, as of December 1, 2012, been concluded.
I am further, inspired and proud to note that all tran-sitional arrangements, ranging from interim over-sight and operational teams have been put in place. Thisiswithaviewthatswiftbutinformedrefinementof the LEDA corporate strategy will inform integra-tion and alignment of previously autonomous man-dates – geared at building capacity to re engineer provincial economic development interventions.
That said, I am sensitive to the need to balance ac-celerated implementation of the LEDA corporate strategy with ongoing research and compliance with a diverse range of regulatory and policy – derived statutes. I am, therefore, confident thatmuchhasbeen done to diversify and innovate around Lim-popo’s economic pillars – that the launch of LEDA
will go a long way in addressing some of the bot-tlenecks and systemic shortfalls that have neces-sitated streamlining of the aforementioned parastat-als into a singular institution. It is proper to thank all accountingofficers,BoardofDirectors,andprivatesector partners for their diligence in ensuring LEDA has a solid foundation and geared for the future.
PinkyKekanaMEC:EconomicDevelopment,Environment and Tourism
MEC’S FOREWORD
1.MMonakedi [ChiefExecutiveOfficer] 4.AShiburi[GM:Mining&GreenEconomyDivision]
7PJMoloisane[GM:ResearchKnowledgeManagement]
2.CMokoma [HeadCEO’soffice] 5.NKekana[GM:Agriculture&Tourism]
8.LMadlala[GM:CorporateServices]
3.NMohlele [ActingGM:Marketing&Communications] 6.SRakumako[GM:BusinessServices]
1
4
7
2
5
8
3
6
“Iam,therefore,confidentthat much has been done to
diversify and innovate around Limpopo’s economic pillars.”
Trade and Investment Limpopo Annual Report March - November 2012 1312 Trade and Investment Limpopo Annual Report March - November 2012
“My board colleagues and I have inherited a healthy and vibrant institution – on whose foundation our mandate in-cludes:ensuring that thecriti-cal component of trade and investment promotion and fa-cilitation is safeguarded and, where applicable, enhanced.”
MUTHUHADINI MADZIVHANDILA
CHAIRMAN
I wish to extend a word of gratitude to Ms. Mkhu-mane, who has ably and diligently chaired the Board of Directors that precedes us. I also wish to thankCEOMonakediandTILofficialsthathavesupported her, in the ongoing management of the transition period, on matters relating to Trade and Investment Limpopo corporate activity.
My board colleagues and I have inherited a healthy and vibrant institution – on whose foun-dation our mandate includes: ensuring that thecritical component of trade and investment pro-motion and facilitation is safeguarded and, where applicable, enhanced. TIL’s portfolio of services and programmes will, as of December 1, 2012, be merged into that of a single provincial econom-ic development agency: the LimpopoEconomicDevelopment Agency. This means, from a gover-nance perspective, that TIL will no longer be an autonomous institution in either its operations or future reporting.
CHAIRMAN’S FOREWORD CHAIRMAN’S FOREWORD
The organisation’s corporate environment is, as we draft this annual report, one of excitement for the future on the one hand, and one of ensur-ing that work undertaken by CEO Monakedi and the management team of Trade and Investment LimpopoisproperlyandefficientlyintegratedintoLEDA. The CEO’s Report captures, in high level detail, Trade and Investment Limpopo’s contribu-tions to the amalgamation process. The interplay between corporate history and future agenda set-ting is, to my mind, key in appreciating the organ-isation’s performance milestones for the period under review. It is worth noting that the merger of LEDET parastatals has triggered new corporate governance obligations; over and above normal business processes. I, on behalf of the Board,
wish to thank the CEO for the capable manner with which he has steered the organisation – dur-ing this evolutionary and transformative period.
MuthuhadiniMadzivhandilaChairman
Trade and Investment Limpopo Annual Report March - November 2012 1514 Trade and Investment Limpopo Annual Report March - November 2012
Trade and Investment Limpopo is, at the time of writing of this report, in the process of being inte-grated into the Limpopo Economic Development Agency (LEDA). This results from amalgama-tion of Trade and Investment Limpopo and two other agencies, namely Limpopo Business Sup-port Agency and Limpopo Agriculture Develop-ment Corporation, into the Limpopo Economic Development Enterprise to form the LEDA. The amalgamation process has prompted the TIL 2012/13financialyearendingafullquarterear-lier than normal. This report, therefore, covers programme implementation information for the March 2012 to November 2013 period.
TIL has, in anticipation of its eminent incorpo-rationintoLimdev,operatedontwoplanes:thefirst was delivery of programmes and partner-ship undertakings as contemplated in the organ-isational annual performance plan, and second, the development of a post amalgamation trade and investment promotion programme. This means that trade and investment promotion will
CEO’S FOREWORD
become one of the programmes in the LEDA corporate strategy.
TIL has in view of the above, aligned execu-tion of its core programmes ( marketing brand-ing, business services, etc)with the long termstrategy of re-engineering the provincial econ-omy. This review, finding institutional home inthe Limpopo Economic Development Agency (LEDA)will,incontinuationofaspectsofwhatissoon to become former TIL’s mandate be staffed by specialists in areas of Foreign Direct Invest-ment (FDI) Domestic Direct Investment andTrade Promotion. Special focus has also been, at programme level, directed at winding down TIL contracts and partnership agreements and, where applicable, reviewing these and aligning them to LEDA’s strategic framework. These in-cluded media and publishing partnership, goods and services agreements, streamlining of pro-gramme focus areas (agribusiness, enterprise development) into envisaged LEDA strategicanchor pillars.
CEO’S FOREWORD
MOTALANE MONAKEDICHIEF EXECUTIVE OFFICER
CEO’S FOREWORD
TIL has in view of LEDA becoming the go–to agency regarding economic development mat-ters, through both programmes and marketing provincial economic sectors and opportunities, been instrumented in guiding and project man-agement of the development of LEDA brand. Considerable time has been invested by TIL officials, in concert with colleagues from otherparastatals, as team members assigned to over-see and project manage various work streams within the wider amalgamation process. These included marketing and communications, legal streams, information and communication tech-nologyinterfaces.Iamconfidentthatworkhis-toricallyundertakenbyTILwill findexpressionin the new agency, and that the new operational environment will bring with it avenues for inno-vation and service excellence. I wish to, in con-
clusion, thank the various Board of Directors, the staff, and the multitude of stakeholders that have supported and believed in TIL programmes over the years.
Motalane MonakediCEO
Trade and Investment Limpopo Annual Report March - November 2012 1716 Trade and Investment Limpopo Annual Report March - November 2012
TheOfficeoftheCEOhasbeencentrallypositionedwithin the organisation to give support to the amal-gamation process, spearheading internal audit, risk management, monitoring and evaluation, strategy coordination, stakeholder management, regional in-tegration, board secretariat and legal services.
During the period under review, the Office of theCEO responded to the changing organisational land-scape, prioritising and providing critical support dur-ing theamalgamationprocessof theentities:Lim-popoBusinessSupportAgency(LIBSA),TradeandInvestment Limpopo (TIL), Limpopo AgribusinessDevelopmentCorporation(LADC),andtheLimpopoEconomicDevelopmentEnterprise(LimDev)intotheLimpopo Economic DevelopmentAgency (LEDA).TheOfficeoftheCEOactedasprojectmanagerforthe amalgamation process and was the stream lead-er to the amalgamation legal process; instrumental intheprocessmappingofworkflowstreams,aswellas drafting of the Annual Performance Plan.
The complex amalgamation process was project managed and successfully completed within a few months and entailed more than 1000 processes in total to ensure a new functional organisation, the Limpopo Economic Development Agency. As the project stream leader: legal services, numerouslegal challenges the various entities faced individ-ually were navigated the all the entities were suc-cessfully fused into a single new entity, the Limpopo EconomicDevelopmentAgency (LEDA).The legalstream ensured that LEDA is a legally sound entity withaspecificmandate ineconomicdevelopment.Process mapping for critical organisational process-es ensures that the amalgamated entity is functional, withclearworkflowprocesses,andgivesguidanceto incumbents holding various portfolios within the organisation. As part of a team drafting the Annual PerformancePlan, theOfficeof theCEOensuredthat the LEDA focused on the main business of eco-nomic development, while being cognisant of, and collaborating with the various functions within each of the entities. The Annual Performance Plan en-sures compliance with Treasury requirements.
TheOfficeof theCEOofferedsecretariatservicesto the board ensuring compliance with Treasury Regulations, the Public Finance Management Act,
the Companies Act and King III. Further the secre-tariat ensured that all board minutes were signed off and that the board underwent training at the Gordon Business Institute of Science. With respect to other legalmatterstheOfficeoftheCEOensuredthatalllabour cases against the organisation were resolved.
From an organisational compliance perspective, the Office of the CEO spearheaded internal audit byplanning the internal audit process and monitoring the internal control environment as well as the Au-ditorGeneral’sfindings.Overtheperiod,theofficeand has been in constant contact with the Auditor General ensuring that the organisation strives to-wardsacleanauditforthe2014financialyear.
TheOfficeoftheCEOisproactiveonmattersofor-ganisational risk. Over the period under review, the division developed a Risk Plan, held internal work-shops on risk management and organised and en-sured that divisions updated their risk registers time-ously. Matters of risk and internal audit are reported to the board.
Monitoring and evaluation of TIL’s performance has beendoneby theOfficeof theCEOensuring thatthere is timeous submission of quarterly reports to the shareholder and the Auditor General.Strategic planning sessions were coordinated through the office, and developed into theAnnualPerformance Plan that gave rise to a contract be-tween the entity and the shareholder, governed by the Auditor General.
From a stakeholder perspective, the Office of theCEO has had frequent engagements with various stakeholders, to maintain relations with everyone from traditional leaders to corporate executives. At acorporateleveltheOfficeoftheCEOhasforgedasound relationship with Price WaterHouse Coopers who have reciprocated by inviting TIL to breakfast with Professor King and have also offered to part-ner with TIL in its interactions with potential inves-tors, advising on investment-related matters. Thus PWCisaprominentpartnerthatinstillsconfidencein potential investors.
From an agricultural perspective, TIL has developed relationships with the Polokwane Agriculture Union,
CEO’S OFFICE
who represent a wide farmer base. This is critical for TIL as it has a major role in growing the provin-cial export base. In the mining sector, TIL has sound relations with the Polokwane Smelter, which is now considering expanding its investments. Relation-ships have also been established with Vanetia Mine, which is expanding their mining operations into a multi billion Rand investment. Vanetia mine has also developed a business hub that will be strategic for investment-promotion activity in the Musina area.
On a the local scene, TIL has a sound working rela-tionship with the Polokwane Municipality, as well as with the Polokwane Chamber of Business, which are critical role players for the TIL, as the organisation interacts with potential investors on a regular basis. Sound relationships have also been forged with the Bela Bela Chamber which is striving to develop the chamber body and attract inbound investments.
TILhasmaintainedrelationshipswithfinancialinsti-tutionsthroughcollaborativeprogrammessuchas:the promotions of the Jobs fund with the Develop-mentBankofSouthernAfrica (DBSA); thepromo-tion of the Special Economic Zones with Department ofTradeandIndustry(theDTI)andpartnershipsonvarious outward missions with the DTI. Other col-laborative programmes with the DTI have been the Africa Dialogue, where renowned patrons from the continent are called upon to introspect and deliber-ate on the development of the continent and engage in dialogue on issues of economic development and form partnership programmes.
From the investment promotion arena, the Depart-mentofTradeandIndustry(DTI)hasbeentargetedwithcooperationopportunities in thefieldofpolicydevelopment. Information exchange occurs on strat-egies and strategy alignment, as well as trade and investment opportunities in targeted countries and potential trade missions. The goal is to develop a platform of dialogue on the processing of invest-ment incentives and to collaborate on programmes with respect to exhibitions / pavilions and other in-vestment promotion activities. TIL also participates actively on the CEO and GM Forums with other provincial investment promotion agencies, cooper-ating and debating issues on investment promotion. Through this partnership, the DTI has approved two
Special Economic Zones for Limpopo, the only prov-ince to be awarded two such zones. TIL maintains its relationships with the investment promotion agencies in South Africa and partners on various investment platforms such as outward-bound missions or joint exhibitions with the DTI or even to dialogue investment promotions issues through the CEO or GM’s forums.
From a regional integration perspective, TIL ser-viced its MOU with its counterparts Zimbabwe In-vestment Authority (ZIA) enhancing relationships.As a follow up, a cross border conference involv-ing stakeholders such as the DTI and ZIA is being planned. TIL has been appointed as secretariat of the joint partnership body between Limpopo and the Matebeleland region. The joint initiative will focus on developing cross-border trade and investments along the borders between South Africa and Zimba-bwe. Other initiatives have included the signing of a MOU with our counterparts in Lesotho, as an initia-tive to strengthen the regional economic block.
From an international perspective, TIL has forged re-lations with SANEC, a Netherlands-based entity with the intention of identifying collaborative programmes ofmutualbenefitinvarioussectorssuchasagricul-ture and the green industry. Through a partnership programme with the European Union TIL exhibited at an EU exhibition in Midrand, promoting Limpopo’s investment offerings to a wider stakeholder base.
Fortheperiodunderreview,theOfficeoftheCEOintroduced added energy into the organisations ac-tivities.Theofficedirectlyandpositivelycontributesto the reputation and brand value of the organisa-tion,andhence‘breatheslife’intotheorganisationsofferings. Given the limited resources, overall the programme exceeded expectations and its success gives a new dimension to TIL’s investment value chain, through governance, compliance and stake-holder engagements. Stakeholder engagements are proving to be a good strategy in increasing TIL’s footprint in the investment promotion arena; espe-cially in light of the limited resources TIL has.
CEO’S OFFICE
Trade and Investment Limpopo Annual Report March - November 2012 1918 Trade and Investment Limpopo Annual Report March - November 2012
CEO’S OFFICE
ANNUAL PERFORMANCE REPORT
MEASURABLEOBJECTIVE
PERFORMANCEMEA-SUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUAL
OUTPUT-VALIDATED
REASONSFOR
VARIANCE
Strategic Manage-ment & Confer-ences
Number of strategic plans and Annual Performance plans(APP)developed
1 Strategic Plan and 1 APP developed
Done Nil
Number of performance reports produced and monitoring and evaluation
5 Performance Reports done Nil
Conferences/investment Road shows
2 strategic conferences Done Nil
Regional Economic Integration
Number of regional intervention
2 Regional partnerships Done Nil
Smart Partnerships Number of stakeholder Engagements
3 strategic partnerships Done Nil
Board secretariat Board minutes signed off Board Minutes reports Done Nil
Legal services Legal Full Legal support Done NIL
Risk Management Risk management developed and implement risk plan
Risk management plan Implemented Nil
NilInternal Audit Internal Audit - Number
of quarterly Audit reports submitted to Audit committee
3auditreporton:• Control Environment• Review of Action Plans
to address AG Findings• Review of Quarterly • Reports
Done
DoneDone
Nil
NilNil
CEO Support CEO Support – number ofNegative criticism with respect to late submissions
Provide full administrative support to CEO on a continuous basis
Done Nil
Enhance Corporate Governance Environment
Transparent business processesfortheofficeofthe CEO
12 Divisional meeting reports
4 Quarterly reports
Updated risk register
8 Staff performance reports
8 Divisional meetings reports done
3 Quarterly reports done
Done
4 performance reports done
The remaining 4 reports will be done in the 4th quarter under LEDA
One report will be done in the 4th quarter under LEDA.
Nil
4 performance reports will be done in the 4th quarter under LEDA
MANAGEMENT
RESEARCH AND KNOWLEDGE
1. Nationalandprovincial economicprofile
Figure 1: Real annual economic growth rate per region for 2011
According to Figure 1, the GDP-R indicates that the highest real annual economic growth at market prices for 2011 were recorded in Gauteng at four percent, followed by the Western Cape and Kwa-Zulu Natal at 3.6 percent. Limpopo is 2.2 percent, which is 0.4 less than the 2010 growth of 2.6 per-cent, and less than the national average of 3.5 per-cent. Limpopo and the Northern Cape recorded the lowest growth rates of 2.2 percent each. The major contributor to the drop of 0.4 percent, is the decline of mining contribution, losing 3.3 percentage points, while agriculture and manufacturing contributions to the GDR dropped by less than a percentage point. In2011Limpoporeflectedtheeconomyinarecov-erymood,buttheactualfiguresshowsthatitisstillmore highly dependent on commodities, making it vulnerable to international price changes. This situ-ationreflectsanurgentneedfortheprovincetostarttakingissuesofcommoditybeneficiationseriously.
4.5
3.5
1.5
2.5
0.5
4
3
1
2
0WC3.6
3.5
EC3.4
3.5
NC2.2
3.5
FS2.5
3.5
KZN3.6
3.5
NW2.7
3.5
GP4
3.5
MP2.5
3.5
LP2.2
3.5
GDPR-2011
Figure 1(Source: STATSSA)
SA -2011
Trade and Investment Limpopo Annual Report March - November 2012 2120 Trade and Investment Limpopo Annual Report March - November 2012
3
5
1
2
4
0
4.1
4.0
3.5
4.0
2.4
4.0
3.2
4.0
4.0
4.0
3.1
4.0
4.6
4.0
3.2
4.0
3.2
4.0
Figure 2(Source: STATSSA)
Figure 2: Average economic growth rate per region: 2001 to 2011
In Figure 2, a comparison of the average real eco-nomic growth rate from 2001 to 2011 recorded by the provincial economies, relative to the national average, shows that Gauteng and the Western Cape were above the national average with rates of 4.6 and 4.1 percent respectively. KwaZulu Natal recorded the same average rate as that of the na-tional economy at 4.0 percent. Limpopo, Mpuma-langa and Free State at 3.2 percent and the Eastern Cape recorded 3.5 percent higher than them with the Northwest at 3.1 percent.
GDPR-2011
SA -2011
MANAGEMENT
RESEARCH AND KNOWLEDGE
Figure 3: Provincial contribution to the South African economy: 1996, 2006 and 2011
Figure 3 depicts the relative ranking of the contri-
butions of the nine provinces to the South African
economy between 1996 to 2011. Gauteng remains
the dominant province at 34.5 percent, followed by
KwaZulu Natal at 15.7 percent and the Western
Cape at 14.2 percent. The three provinces collec-
tively contributed nearly two-thirds to the South Af-
rican economy, though they have shown a decline
in their contribution over the period. Limpopo and
Mpumalanga have recorded a positive growth in
terms of relative size, with Limpopo increasing from
6.8 percent to 7.1 percent.
35
15
25
5
30
10
20
0WC14.314.5
EC8.37.7
NC2.12.2
FS6.05.4
KZN16.816.2
NW6.46.5
GP33.633.8
MP6.96.9
LP5.66.8
1996
Figure 3(Source: STATSSA)
200614.2 7.5 2.2 5.3 15.7 6.5 34.5 7.0 7.12012
MANAGEMENT
RESEARCH AND KNOWLEDGE
2. Gross domestic product, Limpopo Table 2 shows the percentage contributions of the different industries, and taxes less subsidies on products.
• ItshowsthatthedominantindustryinLimpopo’seconomyisminingandquarrying,followedbythe general government services sector.
Current prices – percentage contributionsIndustry 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Primaryindustries 28.5 26.1 24.9 25.8 27.9 28.9 31.3 29.6 29.8 31.9Agriculture,forestryandfishingMining and quarrying
2.426.0
3.722.4
3.221.7
2.623.2
2.825.0
2.926.0
3.028.3
2.926.7
2.727.1
2.529.4
Secondaryindustries 7.7 8.0 7.8 7.7 7.4 7.1 7.8 8.1 7.8 7.7ManufacturingElectricity and waterConstruction
3.52.51.7
3.62.91.4
3.62.61.5
3.42.71.6
3.12.51.7
2.72.51.9
3.32.42.0
2.82.92.4
2.72.82.3
2.52.82.5
Tertiaryindustries 54.8 56.6 57.0 55.8 54.0 53.0 51.3 52.7 52.8 50.0
Wholesale and retail trade; hotels and restaurantsTransport and communicationFinance, real estate and business servicesPersonal servicesGeneral government services
11.2
7.514.24.5
17.3
11.4
7.815.14.7
17.5
11.7
8.514.44.7
17.7
11.1
8.414.94.7
16.6
10.6
7.515.24.4
16.3
10.2
6.915.24.4
16.3
10.5
6.714.5
4.115.6
10.1
6.614.8
4.416.8
10.7
6.314.1
4.017.6
10.8
5.414.0
3.816.0
Allindustriesatbasicprices 90.9 90.7 89.8 89.2 89.2 89.0 90.3 90.4 90.4 89.7Taxes less subsidies on productsGDPRatmarketprices
9.1100.0
9.3100.0
10.2100.0
10.8100.0
10.8100.0
11.0100.0
9.7100.0
9.6100.0
9.6100.0
10.3100.0
Table 2(Source: STATSSA)
Trade and Investment Limpopo Annual Report March - November 2012 2322 Trade and Investment Limpopo Annual Report March - November 2012
MANAGEMENT
RESEARCH AND KNOWLEDGE MANAGEMENT
RESEARCH AND KNOWLEDGE
3. InvestmentTrends
3.1 FDIrecoverytogainmomentum in2011
Globalforeigndirect investment(FDI)inflowsrose16% in 2011, surpassing the 2005 to 2007 pre – cri-sislevelforthefirsttime,despitetheglobalfinancialand economic crisis of 2008 to 2009. A resurgence in economic uncertainty and the possibility of lower growth rates in major emerging markets, risks un-dercutting this favourable trend in 2012. UNTACTD predicts the growth rate of FDI will slow in 2012, withflowslevellingoffatabout41.6trillion,themid-pointoftherange.UNCTADpredictsFDIflowswillcontinue their recovery to reach $1.8 trillion and $1.9 trillion in 2013 and 2014 respectively.
FDIflows todevelopedcountriesgrew robustly in2011, reaching $748 billion, up 21 percent from 2010.Nevertheless, the level of their inflowswasstill a quarter below the level of the pre-crisis three year average. Rising FDI in developing countries on the other hand was mostly driven by a 10% increase in Asia and a 16% increase in Latin America and the Caribbean. Flows to Africa, in contrast, continued their downward trend for a third consecutive year, but the decline was marginal. The poorest countries remained inFDI recession,withflows to the leastdeveloped countries retreating 11 percent to $15 bil-lion.
ThegrowthoftheFDIinflowsin2012willbemoder-ate in all three groups - developed, developing and transition economies.
3.2LimpopoFixedcapitalinvestment
According to TIL’s investment tracking system from April 2012 to November 2012, Limpopo attracted R19.743 billion of investment. Total jobs created amounted to 34 188 during construction phase and 1 085 during operational phase. Total investment fa-cilitated by TIL amounted to R2.606 billion.
During 2012 Sekhukhune was the highest receiver at R12.9 billion worth of investment and its contri-bution has increased by comparison to R1.7 billion in2011.Thesecondhighestinvestmentinflowwasrecorded in the Waterberg district, with investment to the value of R3.5 billion. This is an increase on the R3.04 billion recorded in 2011. Vhembe’s con-tribution increased from R1.7 billion in 2011 to R2.8 billion in 2012. Capricorn’s contribution declined from R1.1 billion in 2011 to R282 million in 2012. Mopani’s contribution also declined from R1.2 bil-lion in 2011 to R136 million in 2012.
35000
15000
25000
5000
30000
10000
20000
0Mopani Vhembe Capricorn Waterberg Sekhukhune Total
927 1649 877 17747 8289 294891217 1786 1136 3044 1726 8909
2010
Source: (TIL Iinvestment Ttracking Ssystem)
2011136 2820 282 3570 12935 197432012
CapitalinvestmentbydistrictR’m
Districtpercentageshareoffixedcapitalinvestment
Sekhukhune’s contribution increased from 19% in 2011 to 66% in 2012. The contribution for Water-berg declined from 34% in 2011 to 18% in 2012, Vhembe’s contribution declined from 20% in 2011 to 14% in 2012. Mopani also experienced a decline from 20% in 2011 to 1% in 2012, Capricorn also de-clined from 14% in 2011 to 1% in 2012.
Capitalinvestmentbysector
Mining was the major contributor of capital invest-ment and have also increased its contribution from 21% in 2011 to 83% in 2012. Retail’s contribution increased from 4% in 2011 to 9% in 2012, the green economy contribution amounted to 13%, however we have never had any green economy projects in the past for a comparison.
Mining was the major contributor of capital invest-ment and has also increased its contribution from
Mopani
66%
14%
1% 1%
18%
Sekhukhune
Capricorn
Vhembe
Waterberg
(Source: TIL Investment Tracking System)
DistrictpercentageshareofFCI
83%
4%
13%
Mining
Retail
Green Economy
21% in 2011 to 83% in 2012. Retail’s contribution decreased from 9% in 2011 to 4% in 2012, the green economy contribution amounted to 13%, however we have never had any green economy projects in the past for a comparison.
(Source: TIL Investment Tracking System)
Capitalinvestmentbysector
4. LimpopoTradeReport
4.1 TradeBalance
For the year 2011 to date there is a trade surplus of R16.4 billion and R12.2 billion for national and Lim-popoprovincerespectively.Thesefigureswerede-rived from a total of R746 billion exports and R730 billion imports nationally; and a total of R15 billion imports and R2.8 billion imports for the Limpopo province.
Trade and Investment Limpopo Annual Report March - November 2012 2524 Trade and Investment Limpopo Annual Report March - November 2012
4.2 Top20Provinciallyimportedproducts
71 Pearls, precious or semi-precious stones, precious metals 206 688 281 563
26 Ores, slag and ash 102 565 351 138
27 Mineral fuels, oils and products of their distillation 68 836 758 739
72 Iron and steel 58 737 432 267
87 Vehicles and parts and accessories thereof 56 076 245 557
84 Nuclear reactors, boilers, machinery and mechanical appliances 48 727 976 314
76 Aluminium and articles thereof 16 389 441 148
08 Edible fruit and nuts; peel of citrus fruit or melons 15 574 181 014
85 Electrical machinery and equipment and parts thereof 14 912 003 017
28 Inorganic chemicals 11 352 347 144
29 Organic chemicals 9 922 056 889
73 Articles of iron or steel 8 942 286 222
39 Plastics and articles thereof 8 596 706 107
22 Beverages, spirits and vinegar 8 199 744 817
74 Copper and articles thereof 7 118 539 325
47Pulpofwoodorofotherfibrouscellulosicmaterial 6 358 973 383
10 Cereals 6 123 109 171
38 Miscellaneous chemical products 5 684 296 568
90 Optical, photographic, cinematographic, etc instruments and apparatus 5 407 747 270
48 Paper and paperboard 4 963 689 617
MANAGEMENT
RESEARCH AND KNOWLEDGE MANAGEMENT
RESEARCH AND KNOWLEDGE
4.3 Top20Provinciallyexportedproducts
26 Ores, slag and ash 6 402 355 417
72 Iron and steel 2 250 496 539
28 Inorganic chemicals 1 970 399 269
08 Edible fruit and nuts; peel of citrus fruit or melons 968 311 559
15 Animal or vegetable fats and oils and their cleavage products 701 802 198
25 Salt, sulphur, earths and stone, plastering materials, lime and cement 601 922 534
87 Vehicles and parts and accessories thereof 283 248 989
34 Soap, organic surface-active agents, etc 281 794 280
11 Products of the milling industry 243 113 244
20 Preparations of vegetables, fruit, nuts 228 889 039
21 Miscellaneous edible preparations 157 831 362
22 Beverages, spirits and vinegar 140 585 306
31 Fertilisers 123 602 030
19Preparationsofcereals,flour,starch,ormilk 80 772 894
74 Copper and articles thereof 70 796 553
33 Essential oils and resinoids 66 656 396
18 Cocoa and cocoa preparations 57 173 114
10 Cereals 53 819 504
84 Nuclear reactors, boilers, machinery and mechanical appliances 47 983 071
04 Dairy produce 44 951 532
Trade and Investment Limpopo Annual Report March - November 2012 2726 Trade and Investment Limpopo Annual Report March - November 2012
MEASURABLEOBJECTIVE
PERFORMANCEMEASUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUALOUTPUT-
VALIDATED
REASONSFORVARIANCE
Effective learning through knowl-edge manage-ment
Value of investments tracked
Value of investments tracked
Totalinvestmentflowsof R19.743bn tracked through Survey, Media auditandVerificationofprojects to date. Of the R19.743bn, TIL has fa-cilitated R2.606m worth of investments
Nil
Tracking model Review of the tracking Model
Investment tracking model implemented at local municipalities
Done
Done
Nil
Nil
Facilitation of investment op-portunities
Number of Investment opportunitiesidentifiedandpackagedin:
MiningAgricultureGreen EconomyTourismBusiness Ser-
vices
Mining1 new investment opportunitiesidentified
Monitoring of the packag-ing of studies completed
Done
Done
Nil
NIL
AgricultureFinalisation of Aloe and Agave studies
Monitoring of the packag-ing of studies completed
Two feasibility studies ( Aloe and Agave processing)completed
Done
Nil
Nil
Green Economy1 new investment opportunitiesidentifiedand packaged
Not done Study was scheduled for end of March 2013, but due to year end being Nov 2012, the remaining study will be completed under LEDA
Tourism1 new investment opportunitiesidentified and packaged
MUTASHI Logistic Hub
Not done Study was scheduled for end of March 2013, but due to year end being Nov 2012, the study will be completed under LEDA
Updated Investment matrix
Updated Investment matrix
Done Nil
MANAGEMENT
RESEARCH AND KNOWLEDGE MANAGEMENT
RESEARCH AND KNOWLEDGE
MEASURABLEOBJECTIVE
PERFORMANCEMEASUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUALOUTPUT-
VALIDATED
REASONSFORVARIANCE
Knowledge management and information sharing
Provide and maintain reliable information
1 annual investment and export updates
4 investment and export trends
Updated Sector Brochures
Annual investment and export report done
3 Quarterly investment and export trends done
Sector brochures updated
Nil
One report was sched-uled for end of March 2013(4thquarter),butdue to year end being Nov 2012, the remaining report will be completed under LEDA
NilAnnual Lekgotla Not done Investment Lekgotla
scheduled for 15 March 2013 but due to year end being Nov 2012, it will be held under LEDA
Updated Trade Matrix Done Nil
Stakeholders to be sup-plied with information
2 libraries to have TIL business sections
Done
Not done
Nil
Negotiations concluded. Awaitingfinalizationofinternalconfigurationofthe libraries.
Strategic partnerships
Forge strategic partnerships
12 strategic partnerships to be serviced
10 strategic partnership serviced
Remaining 2 partner-ships will be serviced under LEDA
Enhance Corpo-rate Governance Environment
Corporate Governance 12 Monthly reports
4 Quarterly performance reports
12 Staff performance reports
1 Updated Risk Register
8 Monthly reports done from April
3 quarterly reports done
4 performance reports done
Done
Remaining 4 divisional monthly reports will be done under LEDA
Remaining quarter report will be done under LEDA
4 performance reports will be done under LEDA. The remaining 4 will not be done due to moratorium on staff ap-pointments
This refer to divisional risk register
Trade and Investment Limpopo Annual Report March - November 2012 2928 Trade and Investment Limpopo Annual Report March - November 2012
DIVISION
MINING AND THE GREEN ECONOMY
1. Diaperproductpackaging manufacturingproject
The division is assisting Afri-Diaper Business Analy-sis Solutions with packaging of a product (dispos-ablediapers)thatisdestinedtobemanufacturedinthe Limpopo Province. SABS is the only accredited agency for product testing in South Africa.
The company is compiling a business case for a manufacturing plant in Limpopo Province. Trade and Investment Limpopo is assisting in the feasibil-ity study and investment mobilisation for the project.
2. DevelopmentofSiyandhana SolarFarmproject (KulaniEngineering)
Trade and Investment Limpopo is assisting in a fea-sibility study of a Green Energy project, Siyandhana
Solar Farm in Giyani, owned by a local engineering company, Kulani Inc, in partnership with the Spain-basedinvestors(equitypartners),Gransolar.
Proposal or a bid document for the project, with the potential to produce electricity energy in the region of 45MW from solar power, is being prepared for submission to the Department of Energy under gov-ernment’sIndependentPowerProducer(IPP)pro-gram, for approval towards implementation.
3. ConcentratedPhotovoltaic (CPV)SolarEnergyFacility– phase1(75MW)project
The division is providing assistance with the devel-opmentofafinalscopingreport forsubmission tothe Department of Energy for Bio Therm Energy Jo-hannesburg, for the proposed Alldays Solar Facility Photovoltaic(PV)/ConcentratedPhotovoltaic(CPV)SolarEnergyFacility–phase1(75MW)project.
MINING AND THE GREEN ECONOMYDIVISION
4. MOA(MemorandaofUnder- standing)CoalIndiaLimited
The Board of LimDev / LEDA and CMR has ap-proved the MOA to be signed between TIL, CMR, LimDev and Coal India Limited, with recommenda-tions for certain changes to be considered. Upon receipt of comments and/or approval from CIL, pro-cessestowardssigningofthedocumentwillbefi-nalised.
5. INCAMinedisposalof shares:IDCandTIL
The IDChasnotifiedstakeholdersandsharehold-ers on Inca Mining Company about its decision to sell 15.4% shares it holds in Inca Mining. A request for a waiver of interest has been sent to Zebediela Mining Company, represented by TIL, to declare in-terest and/or allow IDC to dispose of its shares.
The decision is being implemented.
6. Missionreports
aOutward-boundmissiontoBotswana
The division undertook an outward-bound Ministerial Mission to Botswana under the leadership of the De-partment of Trade and Industry and President Zuma. The mission was undertaken to allow bilateral trade negotiations with Botswana, and signing of co-op-eration agreements with various ministries between the two countries. The mission took place between 27and 31 August 2012.
Backgroundandoutputofthemission:
• President Zuma led a presidential mission to Bo-tswana, accompanied by ministers from various nationaldepartmentsincluding:theMinisterofIn-ternational Relations and Cooperation, Ms. Maite Nkoana-Mashabane; the Minister of Energy, Ms. Dipuo Peters; the Minister of Water and Environ-mental Affairs, Ms. Edna Molewa, and the Minis-ter of Mineral Resources, Ms. Suzan Shabangu.
• South Africa and Botswana signed three Memo-
randa of Understanding (MOU) to establish abi-national commission to plan and implement bilateral programmes of cooperation, in order to enhance and promote the development of the two countries.
• Another MOU was signed to promote and facili-tate cooperation between the two countries in the fieldsofeconomics,science,technology,culture,defence and security.
• TheministersthatsignedtheMOUsincluded:a. SA’s Minister of International Rela-tions and Cooperation, Ms. Maite N k o -ana-Mashabane, and Botswana’s Minister of Foreign Affairs and International Cooperation, Mr. Phandu Skelemani.b. SA’s Minister of Energy, Ms. Dipuo Peters, and Botswana’s Minister of Energy, Dr. Kedikilwe, for the exchange of information on the countries’ respective programmes on coal commercialisation, distribution and marketing of coal derivatives, among others. c. SA’s Minister of Water and Environmental Affairs, Ms. Edna Molewa, and Botswana’s Minister of Environment, Wildlife and Tourism, Mr. Kitso Mokaila, on the regional environment and social assessment of coal-based energy projects along the border be-tween Botswana and South Africa.
• In this, the parties agreed to focus on issues that couldhavesignificantimpactondecisionmakingand proposed coal-based investments and proj-ects in the Botswana-South Africa border area.
• Cross-border, large-scale cumulative impacts are contemplated in this area, including in the areas of emergency, accidental and natural disaster oc-currences.
• Trade and Investment SouthAfrica (TISA) andBotswanaTradeandInvestmentCentre(BITC),also signed a Memorandum of Understanding, representedbyMs.PumlaNcapayi (TISA)andMr.LameckNthekela(BITC).
Trade and Investment Limpopo Annual Report March - November 2012 3130 Trade and Investment Limpopo Annual Report March - November 2012
b. Outward-boundMissiontoZimbabwe
The division participated in the DTI’s International Trade Initiative (ITI) toZimbabwewith theDeputyMinister of Trade and Industry, Hon Elizabeth Tha-bethe, targeting the following sectors: agriculture,miningandmineralbeneficiation,thegreenecono-my and infrastructure. The mission took place from 15 to 19 October 2012.
Backgroundandoutputofthemission:• DeputyMinisterofTradeandIndustry(theDTI),
Hon Elizabeth Thabethe led the trade initiative, with an entourage of approximately 35 business delegates, including Provincial Investment Pro-motionAgencies(PIPAs),andTradeandInvest-ment Limpopo.
• This ITI is a South Africa government initiative to have local business participate with Zimbabwe in the economic recovery of Zimbabwe, and to seize trade and investment opportunities that come with the revival of Zimbabwe.
• Trade and Investment Limpopo had two busi-nesses joining the mission, the Limpopo Water Initiative (LWI) and SFM Jewellers, a Polok-wane-based jewellery processing entity.
• During the mission, South Africa’s DTI signed aMemorandum of Understanding (MOU)withZimbabwe’s Ministry of Small and Medium En-terprises and Co-operative Development, for joint collaboration in the field of SMME andco-operative development. Director General of Trade and Industry, Mr. Sipho Zikode repre-sented South Africa in the signing and the per-manent Secretary of the Ministry of Small and Medium Enterprises and Co-operatives, Mrs Evelyn Ndlovu, represented Zimbabwe.
• Alongside the DTI ITI to Zimbabwe, was Polok-wane’s executive mayor’s visit to Bulawayo, Zimbabwe, to finalise the twinning agreementbetween Polokwane and Bulawayo, as part of the deliverables of the Limpopo Trans-Limpopo Spatial Development Initiatives.
• Executive Mayor of Polokwane, Hon Cllr Fred-dy Greaver and Mayor of the City of Bulawayo, Hon Cllr Moyo, signed the twinning agreement on Friday, 19 November 2012 at Bulawayo’s Council Great Hall at a gala dinner.
c. Outward-boundMissiontoMexico
The division undertook an outward-bound mission to Mexico to participate in the Americas and Carib-bean Regional Diplomacy Workshop. The mission took place from 1 to 10 December 2012.
MININGSECTOR
1. GiyaniDimensionStoneproject
The division has been involved in facilitating estab-lishment of a granite stone crushing project in the Gi-yani area. The project is owned by two young black entrepreneurs from the same area. This project will not be limited to production of stone aggregates, but will also encompass a quarry which will exploit the black coloured granite resource for stone blocks that are suitable for manufacturing of rock slabs for use intombstones,kitchenstonecountertopsandfloortiles. The company Eudan Mining has seven mining permits within an area which consists of about three granite outcrops. These outcrops represent very strategic granite resources which could be mined for a period of over twenty years at full production. The project has the potential to attract an investment of R30 million and create about 50 job opportunities. TIL isalsopromoting theproject tofindanequityand technological partner who could get involved in this venture. A business plan has been created for the project, and funding is being sought from local financialinstitutionsliketheNationalEmpowermentFund and the DBSA Growth Fund.
2. TheSteamboatGraphite
As part of promoting small-scale mining initiatives in the province, the division is busy facilitating the establishment of a graphite mine around the Alldays (Ga-Kibi)area.TheprojectislocatedontheSteam-boat farm. This farm is enriched with good graphite resources. It is estimated that the ore deposit on this property are in excess of 2.5 million tons. The grade of this graphite resource is determined to be in the range of 8.8 %. The project is owned by two emerg-ing black mining entrepreneurs and their company, Factonex Mining. Three properties namely, Inkom,
DIVISION
MINING AND THE GREEN ECONOMY MINING AND THE GREEN ECONOMYDIVISION
Arrie and Steamboat have been earmarked for min-ing. TIL, is currently facilitating a joint venture part-nership between Factonex and a Chinese company, the SAMWHA Group who are pledging to capitalise the project in the amount of R20 million. This poten-tial Investor is still appraising the project before they will fully invest in it.
Experts are busy appraising the graphite deposit at Steamboat.
3. TheGravelloteIronOreProject
A provincial emerging black woman entrepreneur has been assisted by TIL to secure prospecting permits for the mining of iron ore in the Gravellotte area.TheDepartmentofMineralResources(DMR)has positively considered this application and grant-ed a prospecting permit during June. Mamokebe Investment(Pty)Limitedwillbeminingtheironoredeposit, identifieda longtimeago,butnotyetde-veloped. TIL, is currently facilitating a joint venture partnership between Mamokebe Investment and ZIA Minerals, in order to secure the capital needed to take the project further. This project will require an investment of close to R3,9 million to undertake the exploration phase.
4. ThePhalaborwaCopper BeneficiationProject
TIL is currently involved in assisting a company, Cuperex to establish a copper beneficiation plantwithin the Phalaborwa mining complex. Cuperex is a technological company that specialises in down-stream value adding of copper. They use a relatively cheaptechnologytobeneficiatecopperandtheyareable to process copper from relatively small and low grade copper deposits to enhance the application ofcopperminerals.Thecopperbeneficationplant,once complete will be able to attract approximately R150 million as an investment within our province. They are using mobile plants that could be moved to various localities to take advantage of other mining opportunities. The province’s copper deposits are relatively small scale, and this type of technology is well suited for these types of copper resources. TIL is working with Cuperex to identify ore deposits
suitable for this technology as this project has the potentialtocreatesignificantemploymentopportu-nities for the people of Limpopo. Three copper prop-erties within the Mopani District Municipality are be-ing appraised for this purpose.
5. BroadBasedBlackEconomic EmpowermentProgramme
The division has been busy facilitating consultative meetings with host communities for the Platreef PGM mining project which is taking place around Mokopane. Twelve communities are involved and a community steering committee was established during July to facilitate and promote Broad Based Black Economic Empowerment initiatives. This multi-year investment project has a potential invest-ment value of R5 billion.
TIL is also part of the Limpopo Government Facilita-tionTaskTeam (GFTT)which is chargedwith thetask to create a conducive investment environment in the mining sector. This is done through encourag-ing what is known as mining hosting communities to collaborate with mining houses that wish to ramp-up or to expand their mining operations in the province. Examples of such communities include the Mohlotlo (PPLMine),Magobading (TwickenhamMine) andSegorong(EmerselyAndalusiteMine)hostcommu-nities. These communities are encouraged to relo-cate from their existing villages and settle into new villages that the mining houses build for them, often costing multi-billion Rands. TIL has been assisting Anglo Platinum to popularise and launch an em-powerment fund for host communities in Limpopo province called the Alchemey Fund. This is a fund worth about R300 million. This fund will assist host communities to buy shares within Anglo-Platinum over a period of 10 years and this will also assist communities to build some of the planned empow-erment projects within their villages.
This is a sod turning ceremony for the new relo-cated Segorong village in Praktiseer.
6. OutwardInvestmentPromotion
An outward-bound mission was undertaken to Zim
Trade and Investment Limpopo Annual Report March - November 2012 3332 Trade and Investment Limpopo Annual Report March - November 2012
babwe in September with the intention of attending the Zimbabwe Mining Investment Conference and to promote regional integration initiatives through possible mining ventures, infrastructure and proj-ect collaborations. A collaboration arrangement has been reached with the Zimbabwe Investment Authority (ZIA), and projects are being identifiedand conceptualised.. A delegation from LEDET, TIL and a group of business people from the prov-ince, accompanied the MEC – Honorable Ms Pin-kie Kekana on this mission. Crucial business meet-ings were set up with very business counterparts in Zimbabwe. The Limpopo delegation managed to meet with Zimbabwe’s Ministers of Economic Affairs, Trade and Industry and Mines and senior
officials for theDepartmentofRoadsandTrans-portandZimbabweInvestmentAuthority(ZIA).
The mission was so successful that an old MOU between TIL and ZIA was resuscitated. The MEC was able to present the Limpopo government’s de-sire and vision to develop a transport link between Zimbabwe and Limpopo for coal haulage, includ-ing a one stop border post at Beitbridge. A courtesy visit was also made to the South African Embassy inHararewhichendedwithanofficialmeetingbe-tween the MEC and South Africa’s Ambassador to Zimbabwe, the Honorable Mr. Madondo.
DIVISION
MINING AND THE GREEN ECONOMY MINING AND THE GREEN ECONOMYDIVISION
MEASURABLEOBJECTIVE
PERFORMANCEMEASUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
MAR-NOV2012FINANCIALYEAR
ACTUALOUTPUT-VALIDATED
REASONSFORVARIANCE
To increase investments and exports in Mining
Mining
Number of Invest-ment Projects to be realized and export value to be realised
2 Investment Projects to be realized and mineral products to be promoted
Value of Investments=R100m
Jobs created = 200
Facilitated launching and construction of the Phalaborwa steel and copper downstream beneficiationplants.Projectowners are Farrastal for steel and Cuperex for copper respec-tively. Construction has started in the beginning of the year. This project will bring about an investment of R150 million and create close to 100 jobs.
Nil
Facilitated a JV Partnership be-tween Factonex and Samwha Group to develop a graphite mine in the Alldays area. This project will attract an invest-ment of R30 million into the province and create about 50 direct jobs.
Nil
Facilitated establishment and development of the Giyani granite quarry for production of stone aggregates and black dimension stone blocks suitable for the ornamental industries. This project will attract and investment of R30 million and create about 50 jobs.
Nil
TIL has been engaged in an effort to promote BBBEE programme by assisting host communities within the Mo-galakwena Municipality to participate in the Platreef and PPL platinum mines. These two projects will inject and invest-ment capital amounting to over R2 billion within the affected communities.
Nil
Trade and Investment Limpopo Annual Report March - November 2012 3534 Trade and Investment Limpopo Annual Report March - November 2012
DIVISION
MINING AND THE GREEN ECONOMY
MEASURABLEOBJECTIVE
PERFORMANCEMEASUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
MAR-NOV2012FINANCIALYEAR
ACTUALOUTPUT-VALIDATED
REASONSFORVARIANCE
AlldaysSolarFarm
Request for Proposals for pre-feasibility study of a 75MW Photovoltaic Solar Farm in Alldays has been issued with Bio Therm Energy Johannes-burg, promoting the project to potential investment partners in targeted selected markets in Asia, Europe and Americas.
Still need Com-mitments from Investors
YingliSolarAssemblingPlant
In consultation with YINGLI Solar Manufacturing Company for potential Solar component assembling Plant in Limpopo, develop and manufacture high-quality solar modules to supply the solar energy farms with component.
Nil
Good Corpo-rate Gover-nance
Transparent business processes
12 Monthly reports
4 Quarterly performance reports
8 Staff performance reports
Annual Report
Mission Report
8 Monthly reports done from April
3 quarterly reports done
4 performance reports done
Done
Done
Remaining 4 divisional monthly reports will be done under LEDA as a new entity
Remaining quarter report will be done under LEDA as a new entity
Remaining 4 performance reports will be done under LEDA as a new entity
None
None
BUSINESS SERVICESDIVISION
This division, which previously was known as Busi-ness Retention Services, was re-named the Busi-nessServicesSectorDivisionduringthefirstquarterof the period under review. Re-naming was to better reflecttheinclusionofthepromotionandmarketingof investment opportunities in commercial property and business process outsourcing and offshoring (BPO&O) sectors to thedivision.The two sectorspreviously fell under the Business Development Division. The new portfolios include investments in shopping centres /malls, office park development,industrial parks, township and related residential property development, broader information and communication technology, as well as business pro-cessing outsourcing and offshoring investment ini-tiatives. The new mandate was added to the current division’s functions of business retention, expansion programmes and municipal partnerships.
As a result of the changes, the division’s annual per-formanceplan(APP)neededtoincludeanallocationof time and resources to these new portfolios - .the division thus had to scale down on its performance targets for aftercare services in terms of the invest-ment values, jobs and a number of investments
ear marked for retention services. Additionally, the numberofstrategicpartnershipswithidentifiedkeystakeholders had to be moderated appropriately to more achievable targets, given the limited human re-sources at the disposal of the division.
ThePhalaborwaCopperBeneficiationProject
The division has completed the review of the three–year Aftercare Strategy which resulted in an imple-mentation plan for an expansion programme. Over 10 company visits were undertaken, to identify com-panies with expansion programmes, in need of ser-vices from state department and agencies.
Issues raised by these enterprises are monitored on an ongoing basis and, in some instances, cases are taken up with relevant authorities and state utility agencies with a view to providing solutions to iden-tifiedproblems.Over70%of the issues raisedbythese companies have been resolved or attended to satisfactorily, resulting in retention of jobs and in-vestments and possible new job creation.
Trade and Investment Limpopo Annual Report March - November 2012 3736 Trade and Investment Limpopo Annual Report March - November 2012
BUSINESS SERVICESDIVISION
BusinessExpansionProgramme
The Business Services Sector Division’s other mandate is to support the companies with expan-sion programmes, with tailormade solutions to addressidentifiedchallengesnegativelyaffectingtheir expansion programmes. The division helps to facilitate better turnaround times in support ser-vices and infrastructure from the relevant govern-ment departments and agencies.
Theexpansionprojectsforthecompaniesvisitedinclude:
• Royal Hotel - To build executive apartments with an estimated capital investment of R15 million and in the process employ about 15 people. The project is already up and running. - Bought and renovated the existing overnight accommodation by investing R 800 000.00 and employing eight people. -Tobuildthe2000seaterconferencecentre: an estimated investment value of R10 million and 10 permanent and 40 temporary jobs created. - Expanded the Ivory Lodge (existingbusiness)from18to28rooms. - In the process of building the Tile Warehouse, at an estimated project value of R2 million.
The division is currently working closely with the Polokwane Municipality to de-bottleneck internal processes for speedy resolution of the challenges the company is currently confronting.
SiliconSmelter
• The Silicon Smelter is planning to expand its operation, by acquiring land for cultiva-tion of timber/charcoal which would result in the creation of over 1000 job opportuni-ties and a further investment of R200m. The division is currently working close-ly with both the Polokwane Municipality
and the Department of Mineral Resources to resolve challenges relating to the land lease and the mining licence renewal respectively.
DBSAJobsFundProjects
The division took a pro-active approach to fa-cilitating access to the Job Fund, initiated by the National Treasury Department, and currently be-ing administered by the Development Bank of SouthernAfrica (DBSA).Acommuniquéwas is-suedtoLimpopocompaniesfordebriefingmeet-ings as well as workshops. The response was positive and eight companies were assisted with adjusting their business models to meet the eligi-bility requirements of the Job Fund. This resulted in applications worth over R 300m being lodged with DBSA.
With the re-opening of the current Job Fund window, the division is working closely with the premier’s office and a number of provincial de-partments, as well as the DBSA to assist more companies. Currently six companies are being assisted with their business models, business plans etc. These companies represent an aggre-gate total of over R100m and a resultant 3000 jobs earmarked for retention.
BusinessProcess,OutsourcingandOffShoring(BPO&O)
Through the intervention of this division, a firstblack-owned call centre business in Limpopo opened its doors this year. This was after the en-trepreneur was assisted with access to marketing platforms for BPO&O operators by the division. A deal was struck between the entrepreneur and an overseasclient.Thefirstphaseofthisprojectisa20-seater call centre and expansion plans are in place for future development.
The division is also working closely with E Smart networks which is operating a 100-seater call centre in Mokopane. The company is being as-sisted to follow up with various provincial govern-ment department to honour their pledges to take
BUSINESS SERVICESDIVISION
up seats at the call centre. This includes agricul-ture, health and local government departments.
BusinessServicesInvestments
Since the take over of the Business Services Sec-tor functions, the division has been able to identify the following investments in shopping and related facilitiestodate:
Seshego Shopping mall, a new mall development at the entrance of the old Seshego. The sod turn-ing ceremony was held in November 2012 and the division is working closely with one of the di-rectors of the project to assist to source tenants. Aganang Shopping complex. The division is cur-rently working closely with the project developers and had already issued a letter of support to the traditional authority. Additionally, the division as-sisted with negotiations between the project pro-moters and services providers to assist with the planning and design processes.
Lebowakgomo shopping mall. The project has been in the pipeline for some time and the division intervened by bringing the project devel-opers in contact with a number of potential in-vestment partners. The parties are now working toconcludethefinaldetailsoftheproject.Work-ing closely with Dinoko Investments, the division has also looked internationally to secure a joint venture partner for township development in Leb-owakgomo.
Finally, the division is also currently assisting the Ngoatokomo mall developers in Sekhukhune dis-tricts and the partners Kerr Developments, with the demographics study for the area earmarked for the project. Terms of Reference for the study have been completed and a study will be commis-sioned in the coming year.Another upmarket apartment project is currently in the pipeline for Polokwane and the investor has alreadyidentifiedasite.
StrategicPartnerships
• The Greater Tzaneen Municipality
- The service level agreement has been signed by Trade and Investment Limpopo and Tzaneen Local Municipality to ap point the service providers to conduct the workshop on industrial incentives. - Provided workshops on the business retention services to the municipalities.
SouthAfricanSupplyDiversityCouncil(SASDC).In line with its strategic partnership objectives, the division hosted a similar presentation involving SASDC, prominent business people and organ-ised business.
SASDC promotes supplier diversity by mobilising stakeholders and affiliated companies to createmarket opportunities for black suppliers across the South African, North American and EU re-gions.
At international level, supplier diversity relates to business processes that aim to use previously under-used minority owned vendors as suppliers.
In South Africa, business processes are aimed at integrating under-used black suppliers into corpo-ration supply chains in a sustainable way, using targeted procurement and supplier development.
A total of 30 Limpopo entrepreneurs turned up for the seminar and the business networking ses-sions. Follow–up between SASDC and a number of local businesseswasconducted for certifica-tion and membership subscriptions.
Trade and Investment Limpopo Annual Report March - November 2012 3938 Trade and Investment Limpopo Annual Report March - November 2012
MEASURABLEOBJECTIVE
PERFORMANCEMEASUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUALOUTPUT-VALIDATED
REASONSFORVARIANCE
To increase Investments in Business Services
Number of business services investments to be recruited
2 Investment Projects to be realized
Value of Investments=R100m
Jobs created = 200
Realised two investment projects whichare:
ProConsol, a 20 seater call centre company in Polokwane which started operating in June 2012. Total investment in this project was R80 000 which created 15 jobs
An upmarket Polokwane Royal residential apart-ments investment worth R110m with 90 jobs.
None
To retain of mining invest-ments
Number of invest-ment in mining retained
2 mining companies to be retained valued at R20m
Retained one investment project through conducting aftercare ser-vices at Silicon Smelters. Renewal of mining licence it is outstanding. The division is currently making follow up with DMR in this regard. In addition, approval for the land lease application was facilitated with Polokwane Municipality.
Follow-ups for retention of 2nd mining company could not be conclud-ed because of lack of staff.
100 mining jobs to be retained
This project involves over R250m and 300 jobs
None
To retain Agri-cultural invest-ments
Number of agricul-ture investments
2 Agriculture companies to be retained valued at R10m.
Retained one agricultural compa-nies through facilitating Goldex applicationforcertificationofvegetable processing and packag-ing through SABS to meet market requirements.
Mike’s Chicken application for job fund was deferred to next window.
50 agriculture jobs to be retained
These projects involves invest-ment in excess of R40m and 30 jobs
None
To retain Tourism investments
Number of tourism investment retained.
2 tourism companies to be retained valued at R10m.
Facilitated one tourism expansion project for Royal Hotel. Expan-sion project valued at R4m
Follow-ups for 2nd tourism company col-lapsed due to lack of staff.
20 tourism jobs to be retained
70 jobs retained None
BUSINESS SERVICESDIVISION
MEASURABLEOBJECTIVE
PERFORMANCEMEASUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUALOUTPUT-VALIDATED
REASONSFORVARIANCE
To retain busi-ness services investments
Number of business services investment to be retained.
2 Business Service to be retained valued at R2m
Retained two investment proj-ects through facilitating licence to increase water supply at Granor Passi, as well as facilitating ac-cess to DBSA managed Job Fund on behalf of Phatsima Chemicals these investments represents over R150m
None
10 business services jobs to be retained
80 jobs retained None
To forge stra-tegic partner-ships
Number of Municipal partnerships forged
4 strategic municipal partnerships
Two strategic partnerships was forged with Greater Tzaneen mu-nicipality. A Service Level Agree-ment proposal is in place.
Due to delays in signing a proposed SLA with Greater Tzaneen Municipality.
Number of Municipal programmes imple-mented
1 Municipal programme to be implemented
Strategic partnership was forged with South African Supply Diver-sity Council for Limpopo business to participate in its supply chain activities.
Remaining two partnerships to be under-taken in the 4th quarter under LEDA
1 Municipal Incentive
Enhance cor-porate gover-nance environ-ment
Transparent business processes
Divisional meetings report
Done None
Quarterly reports Done None
Staff performance reports Not done Assessments deferred to endoffinancialyear.
Updated Risk Register Done None
BUSINESS SERVICESDIVISION
Trade and Investment Limpopo Annual Report March - November 2012 4140 Trade and Investment Limpopo Annual Report March - November 2012
MEASURABLEOBJECTIVE
PERFORMANCEMEASUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUALOUTPUT-VALIDATED
REASONSFORVARIANCE
To increase investments and exports in Agriculture
AGRICULTURE
Agricultural Invest-ment Projects and 1 X Green Economy-related project to be promoted/marketed
2 X Investment Projects to be promoted. Target R80m
2 Investment projects promoted
No investment value realised
no jobs created
Investment oppor-tunities amounting to R35 million were facilitated but aborted due to technical chal-lenges. Efforts are continuously being made under LEDA as the new entity to promote the project
EXPORTS:AGRICULTURAL PRODUCTS
Export of Agricultural Products to the tune of R50m
Done Nil
To increase investments and exports in Tourism
TOURISM
2 X Tourism Investment Projects to be promoted/marketed
2 X Investment Projects to be promoted/marketed
Target:R20m
2 Investment projects pro-moted
No investment value realised
No jobs created.
The investment not realised.The project aimed to create 100 jobs
TIL packaged Nwanedi Game Reserve and pro-moted it. The project required an initial R160 million and up to a total of R450 million. Investment opportunity of R160 million was facilitated but aborted due to technical challenges. Efforts are continu-ously being made un-der LEDA as the new entity to promote the project
A mini theme park investment project was packaged and promoted during the year. An investment opportunity of R450 million was facilitated and promoted, name-ly Buffalo Beach but aborted due to tech-nical challenges.
AGRICULTURE AND TOURISMDIVISION
MEASURABLEOBJECTIVE
PERFORMANCEMEASUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUALOUTPUT-VALIDATED
REASONSFORVARIANCE
EXPORTS:CURIO,PRODUCTS OF ARTS & CRAFT
Export products of Curio, Arts & Craft to the tune of R100 000
On the spot sales of R93 491 was made and R50 265 worth of orders SA Handmade show.
No jobs created
Sales R93491
Export value of R100 000 not achieved, but the actual ex-portfiguresandjobscreated will be known in the 4th quarter under LEDA.
Agro-processing (Agriculture based raw material for Oil and Biodiesel - Included in 7.3.1 above)
1 X Investment Project Done Nil
Export Development 2 X Export Development Training Meetings/Ses-sions/Workshops per year
Two Lodges received train-ing from PUM which is one of the organisation from the Netherlands which TIL has formed strategic relationship with for the purpose of skills transfer to Limpopo busi-nesses. These two lodges namely Limpopo guest Manor and Hayani Lodge has taken advantage of the strategic partnership whereby TIL has facilitated the coming of the expert to train them in the area of need and challenge.
Nil
5 Exporters to be devel-oped per year
100 Limpopo craft business-es put on the incubation pro-gram implemented by South African Bureau of standards (SABS)withthesupportofthe Department of Trade and Industry as part of exporters development
Nil
Enhance corporate governanceenvironment
GOOD CORPORATE GOVERNANCE
Monthly Meetings
Quarterly reports
Annual Report
Mission Reports
Staff performance report
Done
Done
Done
Done
Done
Nil
AGRICULTURE AND TOURISMDIVISION
Trade and Investment Limpopo Annual Report March - November 2012 4342 Trade and Investment Limpopo Annual Report March - November 2012
CORPORATE MARKETING ANDCOMMUNICATIONS DIVISION
CORPORATE MARKETING ANDCOMMUNICATIONS DIVISION
The Marketing and Communications Division provides ongoing public relations and brand-promotion support to various TIL programmes and activities. The division plays a key role in ensuring that the work carried out by TIL is effectively communicated to internal and ex-ternal stakeholder groups
KeyFocusAreas
The marketing and communications division focuses onthefollowingprogrammesandsub-programmes:
Sub-programme5.1CorporateMarketing
Corporate marketing involves creating activities and projects that develop and promote Trade and Invest-ment Limpopo’s corporate brand, and achievements in the discharging of the organisation’s mandate. Cor-
poratemarketing issplit intospecificareas,suchasadvertising, strategic marketing, events and exhibi-tions, branding as well as management of the Corpo-rateSocialInvestment(CSI)programme.
Sub-programme5.2CorporateCom-munications
This sub-programme focuses on communicating the TIL mandate to a cross section of stakeholders, includ-ing media, government departments, corporate com-panies, as well as investors. Special focus is given toprofilingworkdonebyoftheofficeofthepremier,the Department of Economic Development, Environ-ment and Tourism, and TIL’s work in relation to other provincial economic development sister agencies. Sub-programmes under this programme include me-dia and publishing partnerships, development of ICT infrastructure, publications and website management.
Programme highlights for the yearunderreviewincluded:
MarketingandCommunicationsStrategyImplementation
The division has, during the period under review, endevoured to implement key aspects of the revised marketing and communications strategy. The division has, for instance, consulted on and developed a Lim-popo Marketing Fund Strategic Framework. Consulted stakeholdersincludethefivedistrictmunicipalities,aswell as the Department of Economic, Development Environment and Tourism. Formal engagements were taken at a provincial South African Local Government Association Provincial Executive Lekgotla for the pos-sible:
• Centralising of provincial market budgeting into a Limpopo Marketing Fund
• Formalisation of Limpopo Market Fund• Representation of municipalities in Limpopo
Economic Development Agency Marketing Fund
BrandDevelopment
The division has concentrated on introducing the Lim-popo Economic Development Agency (LEDA) as anew institution, replacing Trade and Investment Lim-popo, Limpopo Economic Development Enterprise, Limpopo Agricultural Corporation, and the Limpopo Business Support Enterprise. Work undertaken in-cluded:
• Development of LEDA branding and brand sup-port material;
• Review of media and publishing partnership con-tracts for alignment with the LEDA corporate strat-egy;
• Internal communications work introducing the LEDA brand to internal stakeholders.
• Development and placement of LEDA branded ad-vertisments in the Financial Mail.
CorporateCommunications:LEDABDFMCORPORATEREPORT
An LEDA focused Financial Mail Corporate Report
was published during the period under review. The content of the report dealt with transition into the Limpopo Economic Development Agency, following the streamlining of provincial economic development agencies. The report also focused on the high-level LEDA strategic framework, and interviews with the MEC, board chairperson, Interim GCEO and private sector inputs from KPMG. Also covered were new and emergingeconomicsectors,diversificationofthepro-vincial industrial base, alignments and lessons from international best practice, labour force issues, as well as reflectionson thecomplimentarynaturebusinessvalue chains.
TILJohannesburgOffice
Ongoing cost-benefits analysis has confirmed theneed for TIL to, in the medium term at least, have anofficeorpresence inGauteng. AsSouthAfrica’seconomichub,andthe ‘Gateway intoAfrica’withre-gards to matters of commerce, Gauteng is like other bigmetropolitanareas(CapeTown,Durban),hostsahigh concentration of government and private sector institutions, central to the delivery of TIL’s mandate. AGautengorJohannesburg-basedoffice for theTILthus:
• Offers sustained access and interfacing with criti-cal consultancy and partnership networks, bearing the merger of Limpopo’s economic development agencies in mind.
• Enables investors and captains of industry with limited travel time or no immediate interest in trav-eling to Limpopo, to consult on Limpopo’s offer-ingsthroughthesatelliteoffice.
• Limits costs incurred for hosting of meetings, cor-porate functions, and workshops by reducing de-pendence on hotels and hired venues.
• Is a corporate brand extension node for Trade and Investment Limpopo, and by implication all pub-lic relations campaigns and activities in the post-merger environment.
• TheGautengofficeassists inthecoordinationofinternalmeetingsandworkspace forTILofficialsandpartnerswhoareawayfromheadofficesonofficialbusiness.
Trade and Investment Limpopo Annual Report March - November 2012 4544 Trade and Investment Limpopo Annual Report March - November 2012
AnnualPerformanceReportApril2012–December2012Sub–Programme1:CorporateMarketing&Communications
StrategicObjectives
KEYPERFORMANCEINDICATOR
ACTUALPERFORMANCEAGAINSTTARGET REASONSFORVARIANCETARGET ACTUAL
Market TIL as Limpopo’s Investment promotion agency
Number of events to enhance Corporate image and Brand visibility.
Revised Marketing and communication strategy
3 Event to enhance cor-porate image and brand visibility
Establishment of Market-ing Fund with seed of R7m
1 events done with brand visibility
Framework formally adopted by stakeholders concern
2 events to be com-pleted in the 4quarter under LEDA frame-work
Implementation will happen under the LEDA framework
Communicate TIL’s role as facilitator of investment op-portunities
Number of Effective electronic, broadcast and print communi-cation coverage
1 Corporate Annual Report
6 Radio Interviews Prime National Radio Time Business Programmes
1 TIL mandate and sec-tor brochures
The Annual Report was pub-lished and distributed
4 Interview were secured with Kaya FM and on Limpopo provincial radio stations
Done.
None
Remaining 2 elec-tronic and broadcast coverage to be done under LEDA
None
Create net-working platforms with external stake-holders
Development of data-base for engagement platforms
Developed database Done None
Enhance corporate governance environment
Divisional meetings reports
Updated Risk Reg-ister
Staff performance report
• Quarterly report• Divisional Annual
report
• Updating the Risk register
• Annual staff perfor-mance assessment
Done Done
Done
Done
NoneNone
None
None
CORPORATE SERVICESDIVISION
The primary aim of this division is to ensure that all Trade and Investment Limpopo’s activities are executed within a framework of sound controls and the highest standards of corporate gover-nance and that efficient and effective servicesare delivered to the organisation with regards to financesandallaspectsofcorporateservices.
FinanceandAdministration
The finance department is responsible foreffectivepreparationand implementationofafi-nancial plan and budget for the organisation and the judicious application and control of public funds. This includes ensuring that accurate fi-nancialrecordsarekeptandthatfinancialproce-dures and controls are being adhered to for ac-countabilityandproper,effectiveandefficientuseof resources, as required by the Public Service Act, 1994 and the Public Finance Management Act, Act 1 of 1999.
Achievements
Our achievements during the eight-month period included:
• Implementingeffectivefinancialpolicies,sys-tems and processes to support the core busi-nessandcontributetoefficient, timeousandtargeted service delivery and monitoring.
• Streamlining and eliminating all manual processes, upgrading of existing accounting systemandfacilitatingconfigurationofexist-ing applications to interface with the account-ing system.
Trade and Investment Limpopo Annual Report March - November 2012 4746 Trade and Investment Limpopo Annual Report March - November 2012
Finance
LookingAhead
Key focus areas for the new reporting year will in-cludethefollowing:
• Successful coordination of financial processeswithin LEDA.
• Keeping 100% accurate accounting records.• Proper co-ordination of month-end and quar-
terly reports and financial year-end with cleardocumented completion guidelines and in com-pliance with the PFMA, Treasury Regulations, GRAP and accounting standards.
• Continuing to ensure that good governance is practiced throughout the LEDA financial pro-cesses.
• Continuing to implement budgetary process in compliance with the PFMA.
• Safeguarding of company assets.
Administration
Achievements
• Our achievements during the period under re-viewincluded:
• Effectively managing Service Level Agreements in respect of operating leases, maintenance contracts and other outsourced administration services.
• Maintaining effective security system and inter-nal controls to safeguard company assets.
LookingAhead
• Key focus areas for the new reporting year will includethefollowing:
• Successful coordination of administration pro-cesses within LEDA.
SupplyChainManagement
Supplychainmanagementisanintegralpartoffi-nancial management. This function requires a col-laborative strategy that integrates the planning, procurement and provisioning processes in order to eliminate non-value adding cost infrastructure, time and activities, while at the same time addressing government’s preferential procurement policy ob-jectives and serving the end-users and customers efficiently.
Achievements
Even though we faced critical challenges during the reporting period in terms of service delivery, due to continuous capacity challenges, we managed to achievethefollowingamongotherthings: • Provided uninterrupted flow of goods/services
withinthelegalframework(PPPFA,BEE)• Ensured that good governance was practiced
throughout the TIL supply chain processes• Implemented supply chain policies and
processes to ensure alignment to all applicable regulations
• Finalised the implementation of a web-enabled purchase order system
• Continued to implement PPPFA and BEE policy in the selection of service providers
• Continued designing strategies, processes and methods to implement and promote BEE and for HDI development
LookingAhead
Key focus areas for the new reporting year will in-cludethefollowing:
• Enhancing systems for integrated planning and implementation and developing an effective re-porting framework for all stakeholders, in com-pliance with the PFMA and applicable regula-tions within LEDA.
CORPORATE SERVICESDIVISION
InformationTechnology
The primary aim of IT is to provide an integrated support service with regards to information tech-nology and systems, with a special focus on IT infrastructure and architectural development that enables the organisation to deliver on its organisa-tional objectives.
Achievements
Our achievements during the period under review included:
• Continuously reviewing and enforcing IT secu-rity, backup and compliance systems
• Continuing to provide a secure and stable net-work infrastructure
• Effectively managing an IT outsourced service in terms of the Service Level Agreement
• Developing and implementing a replacement cycle plan and a disposal plan for IT equipment
• Developing an IT Governance Framework • Assisting with the implementation of the planned
financial,procurementandassetsystemstoin-creaseefficiencywithinthesedepartments
LookingAhead
In the new reporting period deliverables include the following:
• Ensuring sound IT/IS governance (compliance, security,backup,disasterrecovery)
• Continue to provide a reliable and appropriate technology foundation that supports LEDA’s current and future IS/IT needs.
HumanResources
Human Resource Management is responsible for developing a culture that unleashes human poten-tial, by creating an enabling environment for people development through strategic corporate initiatives that focus on coaching and mentoring, on-going performance management and proactive workforce practices such as succession planning, recruitment
CORPORATE SERVICESDIVISION
and selection and sound employee relations.Achievements
Due to capacity challenges in the Human Resourc-es Department some of the 2011/2012 objectives wereonlypartiallyachieved:
• Somekeyandcriticalpositionswerefilleddur-ing the period under review
• Finalisation of all HR amalgamation processes within LEDA
• Implementation of the LEDA organogram• Participation in the development of LEDA poli-
cies and procedures• Successful implementation of the Premier Em-
ployee Self Service system
Trade and Investment Limpopo Annual Report March - November 2012 4948 Trade and Investment Limpopo Annual Report March - November 2012
Sub–Programme1.2:Finance,AdministrationandSupplyChainManagementServicesMEASURABLEOBJECTIVE:Tocreatea
compliantorganisationwitheffective
financialprocessesandsystems
PERFORMANCEMEASUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUALOUTPUT-
VALIDATED
REASONSFORVARIANCE
AchieveanunqualifiedAudit Report
UnqualifiedAuditor-General’s Report with a reduction in audit queries
Audit still in progress None
Allfinancialpoliciesand procedures reviewed and imple-mented
Fraud prevention and detection plan and policy devel-oped and imple-mented
Internal and external audits conducted
Risk management plan and policy developed, commu-nicated and imple-mented
Fully functional financialmanage-ment systems established
Rolling out and imple-mentation of approved financialpoliciesandprocedures
Approved fraud preven-tion and detection plan and policy implemented
Conduct internal and external audits
Risk management plan and policy communicated and implemented
Fully implement Pastel Evolution and integrate with VIP payroll system
Financial policies and proce-dures implemented.
Evaluate the effectiveness on the implementation of policies and procedures.
Fraud policy, prevention and detection plan being imple-mented.
Quotations from service providers have been sourced to run a fraud prevention and detection workshop.
Clean audit action plan has been developed, distributed and is being implemented.
A risk management workshop was held.
Risk register was updated.
Risk and management plan and policy is being imple-mented.
Risk management interven-tions are being implemented.
Pastel Evolution accounting application & web-enabled purchase order system implemented.
Monitor and evaluate prog-ress on implementation of AccPac.
Nil
Nil
The new LEDA policy to be work shopped in the last quarter.
Nil
Nil
Nil
Nil
CORPORATE SERVICESDIVISION
MEASURABLEOBJECTIVE:Tocreatea
compliantorganisationwitheffective
financialprocessesandsystems
PERFORMANCEMEA-SUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUALOUTPUT-
VALIDATED
REASONSFORVARIANCE
Accurate asset reg-ister managed and maintained
Reporting Frame-work in compliance with the PFMA and Treasury Regula-tions implemented
Fully Implement web-enabled purchase order system
Fully implement business integrated system
Implement integrated asset software application and maintain 100 % ac-curate asset register
Implementing reporting framework in compliance with the PFMA and Trea-sury Regulations
Web-enabled purchase order system implemented.
BIS system partially imple-mented.
Delayinreceivingconfir-mation of banking details from suppliers in order to load them onto the system.
Fixedassetverificationexercise was conducted.
Full integrated system used and accurate asset register maintained.
AFS & administration re-ports were prepared & sub-mitted to the AG, LEDET & Provincial Treasury in compliance with PFMA & Treasury regulations
Nil
Capacity chal-lenges within the division and repri-oritization of focus on amalgamation in preparation for year-end close. Full implementation to be done in the 4th quarter under LEDA.
Nil
Nil
Provide uninterrupted flowofgoodsandser-vices within the legal framework (PPPFA, BEE)withstrictercontrols on quality and quantity of goods and services secured
PPPFA and BEE policy in the selec-tion of service pro-viders implemented.
Number of service level agreements reviewed
Maintenance of reliable andverifiablesupplierdatabase
Reviewing, managing 12 service level agreements and monitoring perfor-mance
Database has been up-dated with new suppliers.
Existing suppliers have been vetted.
18 SLA’s reviewed and extended
Nil
Nil
CORPORATE SERVICESDIVISION
Trade and Investment Limpopo Annual Report March - November 2012 5150 Trade and Investment Limpopo Annual Report March - November 2012
Sub–Programme1.3:InformationTechnologyMEASURABLEOBJECTIVE:
ToProvidesecure,stableandcompliant
ITenvironment
PERFORMANCEMEASUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUALOUTPUT-
VALIDATED
REASONSFORVARIANCE
IT policies and disaster recovery plan developed
Disaster recovery plan approved
Policies and pro-cedures approved and implemented
Approved replace-ment cycle plan implemented
Approved Dispos-al policy imple-mented
Internal and External Audits conducted
Number of meet-ings held to evalu-ate performance on outsourced IT services
Approved disaster recovery plan imple-mented
All approved compliant policies and procedures implemented
Approved replacement cycle plan implemented
Approved disposal poli-cy fully implemented
Conduct internal and external audits
12 Meetings
Partially implemented.
Procurement of backup server and software for DR site.
Procurement of UPS and backup media tapes.
Fully compliant policies and procedures implemented
Approved replacement cycle plan implement-ed
Approved disposal policy implemented
Clean audit action plan has been developed, distributed and is being implemented.
9 meetings held
Cost implications of the entire DR site and the amalgama-tion process.
Awaitingfinaliza-tion of the amal-gamation process and decision with regards to the DR site solution.
Nil
Nil
Nil
Nil
This is due to the difference in the re-porting date ending 30 November 2012, the three to be held in the 4th quarter under LEDA
CORPORATE SERVICESDIVISION
Sub–Programme1.4:HumanResourceManagementMEASURABLEOBJECTIVE:Toensurea
supportiveandenablingenvironment.
PERFORMANCEMEA-SUREORINDICATOR
TARGETFOR2012/2013ASPERAPP
2012/13FINANCIALYEARACTUALOUTPUT-VALI-
DATED
REASONSFORVARIANCE
Compliant policies and procedures imple-mented
All HR policies and procedures reviewed, ap-proved and imple-mented
Implementation of reviewed HR policies and procedures
HR policies and procedures imple-mented
None
Motivate, develop, attract and retain skills within TIL
An approved attraction, reten-tion, succession planning and talent manage-ment strategy fully implemented
New performance management sys-tem implemented
Approved Work-place Skills Plan implemented
Employee equity plan developed
Comprehensive plan fully implemented
All users trained and performance man-agement system fully implemented
Annual Workplace Skills Plan developed, approved and imple-mented
Employment equity plan developed, ap-proved and imple-mented
Not done.
A workshop was held with EXCO and Man-agement to develop a plan for managing the Talent Pipeline.
Performance man-agement system fully implemented and all staff members were trained on the ESS module.
Performance con-tracts for all staff were signed.
Performance apprais-als were conducted.
ThefinaldraftofWSPis in place.
N/A
Board has the new plan on hold pend-ingthefinalizationof the amalgama-tion process. To form part of the LEDA policies in the next financialyear.
None
Pendingfinalizationof the amalgama-tion process, the finaldraftwillform part of the LEDA policies in the next financialyear.
Nil
CORPORATE SERVICESDIVISION
Trade and Investment Limpopo Annual Report March - November 2012 5352 Trade and Investment Limpopo Annual Report March - November 2012
TradeAndInvestmentLimpopoEmploymentEquityStatisticsAsAt30November2012Male Female
OccupationalLevel A C I W Total A C I W Total TOTALTop Management 5 - - - 5 2 - - - 2 7Middle Management 6 - 1 - 7 3 - - - 3 10Professionals 3 - - - 3 8 - - 1 9 12Admin and Support Staff - - - - - 5 - - - 5 5General Staff 3 - - - 3 3 - - - 3 6
Total 17 - 1 - 18 21 - - 1 22 40
ResignationsDuring2011/2012Female Female
OccupationalLevel A C I W Total A C I W Total TOTALTop Management 1 - - - 1 - - - - - 1Middle Management - - - - - - - - - - -Professionals - - - - - 1 - - - 1 1Admin and Support Staff - - - - - 1* - - - 1 1General Staff - - - - - - - - - - -
Total 1 - - - 1 2 - - - 2 3
* Deceased
CORPORATE SERVICESDIVISION
FINANCIAL STATEMENTS
Financial Statements
Trade and Investment Limpopo Annual Report March - November 2012 5554 Trade and Investment Limpopo Annual Report March - November 2012
CORPORATE GOVERNANCESTATEMENT
1. Compliance
Trade and Investment Limpopo (TIL) is listed asa schedule 3C public entity in the Public Finance ManagementAct,1999(Act1of1999)andassuchendorses the principles as set out in the Protocol on Corporate Governance, and where applica-ble, the King 111 Code on Corporate Governance and has endeavored to comply with the principles incorporated in the Code of Corporate Practices and Conduct.
Trade and Investment Limpopo has a formalized system of Corporate Governance as set out below.
2. GoverningBodies
2.1 BoardofDirectors
Trade and Investment Limpopo has a Board structure that is made up of a majority on non-ex-ecutive members who are appointed by the MEC for Economic Development, Environment and Tour-ism in Limpopo. The Board meets at least once a quarter.
The framework for the payment of directors remuneration is approved by the MEC for Economic Development, Environment and Tourism in Limpopo. Directors of TIL attend induction programmes which are organized by the Executive.
3. TheBoardofDirectorshasappointedthreesub-committeestoassistincarryingoutitsresponsibilities
In line with the Premier’s pronouncement a new single Accounting Authority was appointed on 05 April 2012.
3.1 BoardCommittees
All Committees carry out responsibilities on behalf of the Board and must appoint at least three Board members per Committee to give expertise on mat-ters pertaining to that Committee’s mandate.
3.2 BoardAudit,FinanceandRiskManagementCommittee
The Board Audit, Finance and Risk Management Committee consists of non-executive Board mem-bers and independent members. The Chairperson is appointed by the Board. The Authority of the Committee is detailed in a charter which is reviewed and approved annually by the Board. The Commit-tee’sdutiesincludereviewingfinancialreportsandcash flow projections, overseeing financial gover-nanceissuesandrecommendingfinancialpoliciesfor approval to the Board. The report of the Board Audit, Finance and Risk Management Committee isincludedintheannualfinancialstatementsandsets out responsibilities covered by this Committee.
3.3 BoardHumanResourcesandRemunerationCommittee
The Board Human Resources Committee consists of non-executive Board members and is chaired by a non-executive member who is appointed by the Board. The committee reviews and recommends annual staff remuneration increases, terms and con-ditions of employment, the payment of incentives andbonuses,generalfringebenefits,remunerationpolicies and the appointment of senior staff.
3.4 BoardProcurementCommittee
The Board Procurement Committee consists of non- executive Board Members and is chaired by a non- executive member who is appointed by the Board. The committee reviews procurement processes and policies.
3.5 ChiefExecutiveOfficerandGeneralManagers
The Chief Executive Officer is appointed by theBoard, as are the General Managers. Both the ChiefExecutiveOfficerandGeneralManagersareinvolved in the day to day business activities of the organization and are responsible for ensuring that decisions, strategies and objectives of the Board are implemented in accordance with the approved
CORPORATE GOVERNANCESTATEMENT
corporate performance plan and budget. The per-formancecontractoftheChiefExecutiveOfficerisapproved by the Board.
4. MaterialityandSignificanceFramework
A Materiality and Significance Framework is inplace and is approved by the Board. Its purpose is to regulate disclosure of material facts to the MEC of Economic Development, Environment and Tour-ism in Limpopo, disclosure in the Company annual financialstatementsandapprovalfromtheMECofEconomic Development, Environment and Tourism in Limpopo for participation in certain transactions. 5. InternalAudit
The Internal Audit function is performed by an ap-pointed audit company which is headed by a direc-tor who is accountable to the Board Audit, Finance and Risk Management Committee.
The Internal Audit functions in terms on an Internal Audit Charter that is approved by the Board. The Charterdefinesthepurpose,authorityandrespon-sibility of the Internal Audit function. Internal Audit carries out its work in terms of a work plan which is basedontheriskprofileofthecompanyandwhichis approved annually by the Board Audit, Finance and Risk Management Committee.
6. ManagementReporting
Comprehensive management reporting disciplines are in place. These include the annual preparation of a corporate performance plan and budget which is approved by the Board and the MEC of Economic Development, Environment and Tourism in Limpopo.
Capacity challenges in Corporate Services are be-ing addressed to ensure consistent and timeous re-porting of monthly results to Management and quar-terly results to the Board. Board Audit, Finance and Risk Management Committee, Provincial Treasury and Department of Economic Development, Envi-ronment and Tourism in Limpopo.
7. CodeofEthics
The company has a code of ethics which requires employees and Board members to observe high ethical standards to ensure that business prac-tices are conducted in a manner which is beyond reproach.
8. Non-FinancialInformation
8.1 EmploymentEquity
Trade and Investment Limpopo has achieved an employment equity target of 93% black represen-tation across all job levels and categories. This criterion is applied as a target for all new appoint-ments and promotions within the organization. The process is monitored on an ongoing basis and is evaluated regularly by the Board Human Resources and Remuneration Committee. Going forward, this targetwillbefurtherreviewedandrefined.
8.2 BlackEconomicEmpowerment
The company is committed to the achievement of the objectives laid out in Government’s Broad-Based BlackEconomicEmpowerment(B-BBEE)strategy.The company has policies and procedures in place which address preferential procurement practices which support black economic empowerment.
8.3 CorporateSocialInvestment
The company has a corporate social investment programme in place which sees the entity becoming involved in the community through support, finan-cial or in kind, of deserving causes, organizations, institutions or projects.
8.4 WorkerParticipation
A process has been activated where employees of TIL participate in discussions on staff welfare and policy formulation through the relevant employee consultative forum.
Trade and Investment Limpopo Annual Report March - November 2012 5756 Trade and Investment Limpopo Annual Report March - November 2012
Name 9/5/2012 22/5/2012 30/5/2012 3/7/2012 31/7/2012 29/8/201225-
26/10/201220/11/2012 11/12/2012
MkhumaneNH(Chair) √ √ √ √ √ √ √ √ √Madzivhandila M.A. (DeputyChair) √ √ √ √ √ √ √ √ √
Kourtoumbellides D √ √ √ √ √ √ √ √ √Maphutha M √ √ √ √ √ √ √ √ √Malumbete V √ √ √ √ √ √ √ √ √Maluleke M E √ √ √ √ X √ √ √ √Sennelo L J √ √ √ √ √ √ √ √ √
8.6 Boardandboardcommitteemeetings
The record of attendance of each member at TIL ordinary board meetings for the period under review is set outinthetablebelow:
8.7 BoardAudit,FinanceandRiskManagementCommitteemeetings:
Name 18/5/2012 29/5/2012 30/7/2012 17/8/2012 20/11/2012 28/11/2012
SenneloLJ(Chair) √ √ √ √ √ √Maluleke M E √ √ X √ √ √Malumbete V √ √ √ √ √ √
CORPORATE GOVERNANCESTATEMENT
8.5 InformationontheNon-ExecutiveandExecutiveDirectorsoftheCompany
TheBoardmembersandDirectorateoftheBoardduringtheaccountingperiodwereasfollows: Boardmember BoardmemberInterim members appointed from 05 April 2012 until 31 December 2012N. Mkhumane ExecutiveDirectorM.A. Madzivhandila MDMonakedi(AppointedinAugust2012)L.J. SenneloD. KourtoumbellidesM. MaphuthaV. MalumbeteM.E. Maluleke
8.8 BoardHumanResourcesandRemunerationCommitteemeetings:
Name 31/5/2012 23/7/2012 27/8/2012 14/11/2012 30/11/2012
MadzivhandilaMA(Chair) √ √ √ √ √Malumbete V √ √ √ √ √Maluleke M E √ √ √ √ √
8.9. BoardProcurementCommitteemeetings:
Name 20/6/2012 6/8/2012 30/8/2012 10/12/2012 14/12/2012
MaphuthaM(Chair) √ √ √ √ √ Kourtoumbellides D √ √ √ √ √ Madzivhandila M A √ √ √ X √
8.10.Boardcreditandinvestmentcommitteemeetings
• NotapplicabletoTradeandInvestmentLimpopo
CORPORATE GOVERNANCESTATEMENT
Trade and Investment Limpopo Annual Report March - November 2012 5958 Trade and Investment Limpopo Annual Report March - November 2012
RESPONSIBILITIES AND APPROVAL
ACCOUNTING AUTHORITY’S
The members are required by the Public Finance Man-agementAct (Act1of1999), tomaintainadequateac-counting records and are responsible for the content and integrityofthefinancialstatementsandrelatedfinancialinformation included in this report. It is the responsibility of themembers toensure that thefinancialstatementsfairly present the state of affairs of the entity as at the endofthefinancialyearandtheresultsofitsoperationsandcashflowsfortheperiodthenended.Theexternalauditors are engaged to express an independent opinion onthefinancialstatementsandweregivenunrestrictedaccesstoallfinancialrecordsandrelateddata.
Thefinancialstatementshavebeenprepared inaccor-dance with Standards of Generally Recognised Account-ingPractice(GRAP)includinganyinterpretations,guide-lines and directives issued by the Accounting Standards Board.
Thefinancialstatementsarebaseduponappropriateac-counting policies consistently applied and supported by reasonable and prudent judgements and estimates.
The members acknowledge that they are ultimately re-sponsibleforthesystemofinternalfinancialcontroles-tablished by the entity and place considerable importance on maintaining a strong control environment. To enable the members to meet these responsibilities, the account-ing authority sets standards for internal control aimed at reducingtheriskoferrorordeficitinacosteffectiveman-ner. The standards include the proper delegation of re-sponsibilitieswithinaclearlydefinedframework,effectiveaccounting procedures and adequate segregation of du-ties to ensure an acceptable level of risk. These controls are monitored throughout the entity and all employees are required to maintain the highest ethical standards in ensuring the entity’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the entity is on iden-tifying, assessing, managing and monitoring all known forms of risk across the entity. While operating risk can-not be fully eliminated, the entity endeavours to minimise
it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.
The members are of the opinion, based on the informa-tion and explanations given by management, that the system of internal control provides reasonable assurance thatthefinancialrecordsmaybereliedonfortheprepa-rationofthefinancialstatements.However,anysystemofinternalfinancialcontrolcanprovideonlyreasonable,and not absolute, assurance against material misstate-mentordeficit.
The entity is wholly dependent on Limpopo Department of Economic Development, Environment and Tourism (LEDET)forcontinuedfundingofoperations.Thefinan-cial statements are prepared on the basis that the entity is a going concern. This basis presumes that funds will beavailabletofinancefutureoperationsandthatthere-alisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
This has been done due to the fact that Trade and Invest-ment Limpopo as a separate legal entity ceases to exist on 30 November 2012, but the mandate of TIL will contin-ueinLimpopoEconomicDevelopmentAgency(LEDA).
Although the accounting authority is primarily responsible forthefinancialaffairsoftheentity,theyaresupportedbythe entity’s external auditors.
The external auditors are responsible for independently reviewing and reporting on the entity’s financial state-ments.Thefinancialstatementshavebeenexaminedbythe entity’s external auditors and their report is presented on pages 67 to 69.
Thefinancialstatementssetoutonpage70to104whichhave been prepared on the going concern basis, were approved by the accounting authority on 31 January 2013andweresignedonitsbehalfby:
M. Madzivhandila M.D. MonakediChairmanoftheBoard ChiefExecutiveOfficer
ACCOUNTING AUTHORITY’S REPORT
TheAccountingAuthoritysubmitsitsreportfortheeightmonthsended30/11/2012.
1.Incorporation
TradeandInvestmentLimpopowasincorporatedon19/05/1997andobtaineditscertificatetocommencebusinessonthesameday.
2.Reviewofactivities
Mainbusinessandoperations
During the eight months period under review Trade and Investment Limpopo’s main business and operations was to contribute to economic growth and development, and to create jobs in the Limpopo through export promotion and investment attraction. There were no major changes in the activities of the business. The amalgamation of TIL, LimDev, LIBSA, and LADC into LEDA will be effective from 1 December 2012.
NetsurplusofTradeandInvestmentLimpopowasR10867226at30November2012;(2012:deficitR5145180).
Corporatestrategy
TradeandInvestmentLimpopocontinuestodevelopstrategyintermsofimplementationofitsmandateasidentifiedbytheshare-holder. This process is guided by the national and provincial priorities received from Limpopo Department of Economic Develop-ment,EnvironmentandTourism(LEDET).
Trade and Investment Limpopo reviews its corporate strategy annually and enters into an agreement with LEDET. Performance againstobjectivesandtargets,asreflectedintheannualperformanceplan,isreviewedquarterlybytheboard.
The annual performance plan was prepared for a 12 month period, however a 8 month performance report was prepared prior to amalgamation into LEDA and the APP could not be changed to accommodate the amalgamation for the initial 8 months.
The following factors contributed to targets not being achieved.
Trade and Investment Limpopo went through at least three budget cuts, due to amongst others, the province being under administration. This had an impact with regards to the planning and execution of programmes and performance targets; Treasury and shareholder directives also contributed to downscaling and or reprioritisation of TIL programmes.
The surrender of accumulated surplus funds upon instruction of the Shareholder, Treasury Notes, and moratorium withregardstofillingofcriticalposts/thusaffectingmannerandtimingoftheexecutionofcriticalfunctions.
3.Goingconcern
As at 30/11/2012, the entity had accumulated a surplus of R 12 079 715 and that the entity’s total assets exceed its liabilities by R 12 235 557.
Thefinancialstatementshavebeenpreparedonthebasisofaccountingpoliciesapplicabletoagoingconcern.Thisbasispre-sumesthatfundswillbeavailabletofinancefutureoperationsandthattherealisationofassetsandsettlementofliabilities,con-tingent obligations and commitments will occur in the ordinary course of business.
Theabilityoftheentitytocontinueasagoingconcernisdependentonanumberoffactors.Themostsignificantoftheseisthatthe Limpopo Economic Development Agency continues to procure funding for the ongoing operations of the entity.
The amalgamation process to merge Trade and Investment Limpopo, Limpopo Economic Development Enterprise, Limpopo Ag-ricultural Development Corporation and Limpopo Business Support Agency into a single economic development agency for the LimpopoProvince(LEDA)willbeeffectivefrom1December2012.TheAccountingAuthoritybelievesthattheincorporationofTradeandInvestmentLimpopo(TIL)intoLimpopoEconomicDevelopmentAgency(LEDA)willbedoneonagoingconcernbasis.
4.Subsequentevents
Thedirectorsarenotawareofanymattersorcircumstancesarisingsincetheendofthefinancialeightmonths,nototherwisedealt
Trade and Investment Limpopo Annual Report March - November 2012 6160 Trade and Investment Limpopo Annual Report March - November 2012
Salary/Fee
Bon
usesand
perform
ance
relatedpaym
ents
Retire
mentF
undcontrib
utions
Medicalcon
tributions
Group
Life&UIF
contrib
utions
Actingallowanceand
other
expenses
Totalpackage30Nov2012
Totalpackage31March2012
ACCOUNTING AUTHORITY’S REPORTTrade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Accounting Authority's Report
9. Directors and executive managers emoluments
Salary or Fee Bonuses andperformancerelatedpayments
RetirementFundcontributions
Medicalcontributions
Group Life &UIFcontributions
ActingAllowanceand Otherexpenses
Total package30 November2012
Total package31 March 2012
Non-Executive MembersMembers 333 333 - - - - 70 982 404 315 500 000
Executive MembersChief Executive Officer 770 389 82 620 105 048 28 651 30 445 - 1 017 153 1 327 530
Executive ManagersGM: Business Retention Services 491 392 45 441 57 776 43 442 17 194 - 655 245 916 905GM: Mining & Green Economy 466 261 37 621 71 273 57 761 20 977 4 387 658 280 938 207GM: Agriculture & Tourism (Resigned inAugust 2012)
356 375 35 329 49 351 20 419 14 213 - 475 687 934 875
Head of the CEO Office 484 889 48 880 62 149 46 387 17 578 8 316 668 199 964 268GM:Research & KnowledgeManagement
515 215 48 884 59 068 38 360 18 421 - 679 948 955 575
GM: Corporate Services 527 771 55 091 52 524 14 793 15 010 - 665 189 866 970Acting GM: Corporate Marketing &Communications
460 329 26 822 34 588 18 508 10 225 58 577 609 049 68 591
GM: Agriculture & Tourism (Appointed inNovember 2012)
77 500 - 9 604 - 2 817 - 89 921 -
GM: Corporate Marketing &Communications (resigned inSeptember 2011)
- - - - - - - 407 480
4 483 454 380 688 501 381 268 321 146 880 142 262 5 922 987 7 880 401
8
Non-Executibe MembersMembers 333 333 - - - - 70 982 404 315 500 000
Executive MembersChiefExecutiveOfficer 770 389 82 620 105 048 28 651 30 445 - 1 017 153 1 327 530
Executive ManagersGM:BusinessRetentionServices 491 392 45 441 57 776 43 442 17 194 - 655 245 916 905GM:Mining&GreenEconomy 466 261 37 621 71 273 57 761 20 977 4 387 658 280 938 207GM:Agriculture&Tourism(ResigninAugust2012) 356 375 35 329 49 351 20 419 14 213 - 475 687 934 875
HeadoftheCEOOffice 484 889 48 880 62 149 46 387 17 578 8 316 668 199 964 268GM:Research&KnowledgeManagement 515 215 48 884 59 068 38 360 18 421 - 679 948 955 575
GM:CorporateServices 527 771 55 091 52 524 14 793 15 010 - 665 189 866 970ActingGM:CorporateMarket-ing & Communications 460 329 26 882 34 588 18 508 10 225 58 577 609 049 68 591
GM:Agriculture&Tourism(AppointedinNovember2012) 77 500 - 9 604 - 2 817 - 89 921 -
GM:CorporateMarketing&Communications (resigned in September2011)
- - - - - - - 407 480
4 483 454 360 688 501 381 268 321 146 880 142 262 5 922 987 7 880 401
ACCOUNTING AUTHORITY’S REPORT
withintheeightmonthsfinancialstatementswhichsignificantlyaffectthefinancialpositionofthecompanyortheresultsoftheop-erations,exceptfortheestablishmentofasingleeconomicdevelopmentagencyfortheLimpopoProvince(LEDA)effectivefrom1December 2012, dissolution of the previous interim board and appointment of the new board as disclosed in item 7 of this report.
5.Accountingpolicies
The following Standards of Generally Recognised Accounting Practice were applied prior to the commencement dates in the cur-renteightmonths:
.•GRAP23:RevenuefromNon-exchangeTransaction .•GRAP24:PresentationofBudgetInformationintheFinancialStatement
TheeightmonthsfinancialstatementshavebeenpreparedinaccordancewiththeeffectiveStandardsofGenerallyRecognisedAccounting Practice issued by the Accounting Standards Board as the prescribed framework by National Treasury on a basis consistentwiththeprioryear’sfinancialstatements.
The adoption of the GRAP standards do not differ or result in material differences in items presented and disclosed in the eight monthsfinancialstatements.TheimplementationoftheGRAPstandardshaveresultedinchangesincertainterminologyusedinthefinancialstatements.Theyareconsistentinallmaterialaspectswithaccountingpoliciesofpreviousyears,exceptotherwisestated.
6.Sharecapital/contributedcapital
There were no changes in the authorised or issued share capital of Trade and Investment Limpopo during the eight months under review.
7.AccountingAuthority
Thedirectorsoftheentityduringthe8monthsareasfollows:
Name Nationality ChangesN.H. Mkhumane South African Appointed 05/04/2012, term expired 31/12/2012M. Madzivhandila South African Appointed 05/04/2012, term expired 31/12/2012D. Kourtoumbellides South African Appointed 05/04/2012, term expired 31/12/2012M. Maphutha South African Appointed 05/04/2012, term expired 31/12/2012L. Sennelo South African Appointed 05/04/2012, term expired 31/12/2012V. Malumbete South African Appointed 05/04/2012, term expired 31/12/2012M.E. Maluleke South African Appointed 05/04/2012, term expired 31/12/2012M. Madzivhandila South African Appointed 01/01/2013 by LEDAM.E. Maluleke South African Appointed 01/01/2013 by LEDAS.D. Simelane South African Appointed 01/01/2013 by LEDAC.T. Mhlaba South African Appointed 01/01/2013 by LEDAD. Lerutla South African Appointed 01/01/2013 by LEDAM. Mosidi South African Appointed 01/01/2013 by LEDAS.R. Monakedi South African Appointed 01/01/2013 by LEDAM.O.M. Moganedi South African Appointed 01/01/2013 by LEDAV. Mothema South African Appointed 01/01/2013 by LEDAT.C. Luvhani South African Appointed 01/01/2013 by LEDAH.B. Khan South African Appointed 01/01/2013 by LEDA
8.Secretary
ThesecretaryoftheentityisCathyMokomaof:
Business address 130A Marshall Street Polokwane 0699
Postal address P O Box 3490 Polokwane 0700
Trade and Investment Limpopo Annual Report March - November 2012 6362 Trade and Investment Limpopo Annual Report March - November 2012
ACCOUNTING AUTHORITY’S REPORT ACCOUNTING AUTHORITY’S REPORT
10.Fruitlessandwastefulexpenditure
The directors are not aware of any fruitless and wasteful expenditures which have been incurred during the eight months periodunderreview,otherthanthosedisclosedinnote34oftheeightmonthsfinancialstatements.
11.Irregularexpenditure
The directors are not aware of any irregular expenditures which have been incurred during the eight months period under reviewotherthanthosedisclosedinnote35oftheeightmonthsfinancialstatements.
12.Materialityandsignificantframework
Amaterialityandsignificantframeworkhasbeendevelopedforreportinglossesthroughcriminalconductandirregular,fruit-lessandwastefulexpenditure,aswellasforsignificanttransactionsenvisagedpersection54(2)ofthePFMAthatrequiresExecutive Authority approval. The framework has been formally approved by the board.
13.Corporategovernance
General
The accounting authority is committed to business integrity, transparency and professionalism in all its activities. As part of this commitment, the accounting authority supports the highest standards of corporate governance and the ongoing devel-opment of best practice.
TheentityconfirmsandacknowledgesitsresponsibilitytototalcompliancewiththeCodeofCorporatePracticesandCon-duct(“theCode”) laidout in theKingReportonCorporateGovernanceforSouthAfrica2002.Theaccountingauthoritydiscusses the responsibilities of management in this respect at board meetings and monitors the entity’s compliance with the code.
Boardofdirectors
Theboard:• etains full control over the entity, its plans and strategy;• acknowledges its responsibilities as to strategy, compliance with internal policies, external laws and regulations, effec-
tive risk management and performance measurement, transparency and effective communication both internally and externally by the entity;
• isofaunitarystructurecomprising: -non-executivedirectors,allofwhomareindependentdirectorsasdefinedinthecode;and - executive directors.• has established a board directorship continuity programme.
Chairpersonandchiefexecutive
TheChairpersonisanon-executiveandindependentdirector(asdefinedbythecode).
The roles of Chairperson and Chief Executive are separate, with responsibilities divided between them, so that no individual has unfettered powers of discretion.
Remuneration
TheupperlimitsoftheremunerationoftheChiefExecutiveOfficer,whoistheonlyexecutivedirectoroftheentity,aredeter-mined by the Parent entity, and the accounting authority will determine the remuneration within the above mentioned limits.
Executivemeetings
Theaccountingauthorityhasmetonnineseparateoccasionsduringthefinancialeightmonths.Theaccountingauthorityschedules to meet at least four times per annum.
Non-executive directors have access to all members of management of the entity.
Auditandriskcommittee
Forthecurrentfinancialeightmonths,thechairpersonoftheauditcommitteewasMs.L.Senello.Thecommitteemetfourtimesduringthefinancialeightmonthstoreviewmattersnecessarytofulfilitsrole.Ms.DLerutlajoinedthecommitteeafterthe eight months as an independent chairperson.
ThemembersoftheBoardAuditCommitteeduringthe8monthswereasfollows:
L.Sennelo (Chairperson) CA(SA)V. Malumbete BProc, LLB, Advanced Diploma in Labour LawMEMaluleke CertificateinRetailManagement,Teacher’sDiploma,DiplomainBusinessManagement
NewCommitteeMembersfromJanuary2013areasfollows:
DMLerutla (Chairperson) BachelorBusinessScience,CFA,HonoursTC Luvhani B. Com Honours, CAIB, MBAM Mosidi B. Com, University Education Diploma
Internalaudit
The entity has outsourced its internal audit function to SizweNtsalubaGobodo.
14.Controllingentity
The entity’s controlling entity is Limpopo Department of Economic Development, Environment and Tourism.
15.Auditors
TheOfficeoftheAuditorGeneralSouthAfricawillcontinueinofficeforthenextfinancialperiodandwillperformtheauditofLimpopoEconomicDevelopmentAgency(LEDA)for31March.
Trade and Investment Limpopo Annual Report March - November 2012 6564 Trade and Investment Limpopo Annual Report March - November 2012
REPORT OF THE BOARD AUDITAND RISK MANAGEMENT COMMITTEE
1. Charter
The Board Audit and Risk Committee (the Commit-tee)isguidedbyadetailedCharterthatisreviewedand approved by the Board on an annual basis. The Committee has regulated its affairs in compliance with this Charter and has discharged all its respon-sibilities as contained therein.
2. Purpose
The Committee’s purpose and responsibilities arise from the Public Finance Management Act of 1999; Sections51(1)(a)(ii)and76(4)(d)ofthePFMAand Treasury Regulations 27.1. In performing its re-sponsibilities the Committee has reviewed the fol-lowing:
• the effectiveness of the internal control systems;
• the effectiveness of the internal audit function;• the risk areas of operations to be covered
in the scope of the internal and external audits;• the adequacy, reliability and accuracy of
financialinformationprovidedtomanagementand other users of such information;
• theaccountingandauditingconcernsidentifiedas a result of the internal or external audits;
• compliance with applicable legal and regulatory provisions;• the activities of the internal audit function, • including its annual work program, external
auditors,thereportsofsignificantinvestiga-tions and the responses of recommenda- tions; and
• the independence and objectivity of the external auditors.
3. Membership
The Committee members were appointed by the Board of Directors and the Committee comprises of at least three non-executive members. The Com-mittee consists of the members listed hereunder and should meet at least quarterly as per the ap-provedCharter.During the financial year 6meet-ings were held.
Nameofmembers Appointed LapsedMs.LJSennelo(Chairperson) May 2012 Nov 2012Ms. V Malumbete May 2012 Nov 2012Mr. M E Maluleke May 2012 Nov 2012Ms.D.MLerutla(Chairperson) Jan 2013 Mr. T.C Luvhani Jan 2013 Ms. M Mosidi Jan 2013
BoardAudit,FinanceandRiskManagementCommitteeMeetings:
1 2 3 4 5 6
Name
SenneloL.J(Chairperson) √ √ √ √ √ √Maluleke M E √ √ X √ √ √Malumbete V √ √ √ √ √ √
4. InternalAudit
The Committee considered and recommended the Internal Audit Charter for approval to the board and approved the annual work plan for the Internal Audit Function. The Internal Audit function is responsible for reviewing and providing assurance on the ade-quacy of the internal control environment across op-erations. The Internal Audit Function is responsible forreportingthefindingsoftheinternalauditworkagainst the agreed audit plan to the Committee on a quarterly basis.
The Internal Audit Function has direct access to the Committee, primarily through its chairperson. The Committee is also responsible for the assessment of the performance of the internal audit function.
The Internal Audit Function is outsourced and inde-pendent and had the necessary resources, budget, and authority within the organization to enable it to discharge its functions. The Consultant reports functionally to the Committee.
29/5
/201
2
18/5
/201
2
30/7
/201
2
17/8
/201
2
20/1
1/20
12
27/1
1/20
12
REPORT OF THE BOARD AUDITAND RISK MANAGEMENT COMMITTEE
Wearesatisfied that the InternalAudit function isoperating effectively and that it has addressed the risks pertinent to the company in its audits. We be-lieve Internal Audit has contributed to the improve-ment of internal controls within the company.
5. ExternalAuditors
The external auditors are Auditor General South Africa . Fees paid to auditors are disclosed in the annualfinancialstatement.TheCommittee,incon-sultation with executive management, agreed to the engagement letter, terms, nature and scope of the external audit plan as presented by the AGSA. We have reviewed the AGSA Strategic Audit Plan for the2013financialperiodandhave recommendedapproval of their budget to the board of directors. TheCommittee has satisfied itself that theAGSAexercised their duties in an independent and objec-tive manner.
6. InternalControlEffectiveness
TheCommitteeissatisfiedthatasystemofinternalcontrols has been put in place and that these con-trols have functioned effectively during the period under review. The Committee considers the sys-tem of internal controls appropriate in all material respectsto:
• reduce risks to an acceptable level;• meet the business objectives;• ensure assets are adequately safeguarded;
and• ensure that transactions undertaken are recorded in the accounting records.
Internal Audit provides the Committee with assur-ance that internal controls are appropriate and ef-fective. This is achieved by means of the risk man-agement process, as well as the identification ofcorrective actions and suggested enhancements to the controls and processes. From the various reports of the internal auditors, we noted that no matters were reported that indicate any material deficienciesinthesystemofinternalcontroloranydeviations there from.
Itwasnotedthatnosignificantormaterialnon-com-pliance with prescribed policies and procedures has been reported.
Accordingly, we can report that the system of inter-nalcontrolsfortheperiodunderreviewwasefficientand effective with the exception of the controls relat-ing to the tracking of irregular expenditure and en-suring non-recurrence thereof.
7. CorporateGovernance
We are of the opinion that the company continues to strive towards complying with sound principles of corporate governance.
As per our discussions with management, manage-mentconfirmsthatthecontentandqualityofmonth-ly and quarterly reports prepared and issued by the CEO during the 8 months under review were prop-erly formulated and have complied with the PFMA in this regard. The Committee is in the process of reviewing its corporate governance practices with a view to complying with the requirements of the 2008 Companies Act as amended and King III rec-ommendations.
8. RiskManagement
The Board assigned the oversight of the risk man-agement function to the Committee. The company developed a risk management strategy and policy which includes the fraud detection and prevention plan and policy. A formal risk assessment was un-dertaken for the 8 months ending 30 November 2012 with quarterly reviews, updates and reports. Consequently, internal audit used this assessment to prepare the 3 year rolling strategic plan and the annual operating audit plan. The Committee moni-tored the significant risks faced by the companythrough reviewing risk reporting.We are satisfiedthat significant risksweremanaged to an accept-able level.
Trade and Investment Limpopo Annual Report March - November 2012 6766 Trade and Investment Limpopo Annual Report March - November 2012
REPORT OF THE BOARD AUDITAND RISK MANAGEMENT COMMITTEE
9. 8MonthsFinancialStatements
TheCommitteehas:
• Reviewedanddiscussedtheauditedfinancialstatements included in the integrated report with the external auditors and management;
• Reviewed and discussed with management the audited performance information;
• Reviewed the external auditor’s management letter and management’s responses thereto; and received and considered report from the internal auditors.
The Committee is concerned about the irregular expenditure and has urged management to put effective processes in place to prevent irregular expenditure,as requiredbysection55(1) (b)of
the PFMA. The Committee is furthermore ex-tremelyconcernedabouttheadversefindingsonpredetermined objectives in terms of usefulness, reliability of performance information and has re-quested assurance of non-recurrence.
The Committee concurs and accepts the AGSA’s conclusionsonthe8monthsfinancialstatements,and is of the opinion that the audited financialstatements be accepted and read together with the report of the AGSA.
10. Conclusion We therefore recommend that the Board approve the audited 8 months FinancialStatements.
MsLMSennelo Chairperson Audit and Risk Committee
REPORT ON THE FINANCIAL STATEMENTS
REPORT OF THE AUDITOR GENERAL
REPORTOFTHEAUDITOR-GENERALTOTHELIMPOPOPROVINCIALLEGISLATUREONTRADEANDINVESTMENTLIMPOPO
REPORTONTHEFINANCIALSTATEMENTS
Introduction
1. I have audited the financial statements of theTrade and Investment Limpopo set out on pages 70 to 104,which comprise the statement of financialposition as at 30 November 2012, the statement of financial performance, statement of changes innetassetsandstatementofcashflowsfortheeightmonths then ended, and the notes, comprising a summaryofsignificantaccountingpoliciesandoth-er explanatory information.
AccountingAuthority’sresponsibilityforthefinancialstatements
2. The board of directors which constitutes the ac-counting authority is responsible for the preparation andfairpresentationof thesefinancialstatementsin accordance with South African Standards of Gen-erally Recognised Accounting Practice (SA Stan-dardsofGRAP)andtherequirementsofthePublicFinance Management Act of South Africa, 1999 (Act No.1of1999)(PFMA),andforsuchinternalcontrolas the accounting authority determines is necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.
Auditor-General’sresponsibility
3. My responsibility is to express an opinion on these financial statements based on my audit. Iconducted my audit in accordance with the Public AuditActofSouthAfrica,2004(ActNo.25of2004)(PAA), theGeneralNotice issued in terms thereofand International Standards on Auditing. Those standards require that I comply with ethical require-ments and plan and perform the audit to obtain rea-sonableassuranceaboutwhetherthefinancialstate-ments are free from material misstatement.
4. An audit involves performing procedures to ob-tain audit evidence about the amounts and disclo-
sures in the financial statements.Theproceduresselected depend on the auditor’s judgement, includ-ing the assessment of the risks of material misstate-ment of the financial statements, whether due tofraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparationand fair presentationof the fi-nancial statements in order to design audit proce-dures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An au-dit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as wellasevaluatingtheoverallpresentationofthefi-nancial statements.
5. I believe that the audit evidence I have obtained issufficientandappropriate toprovideabasis formyunqualifiedauditopinion.
Opinion
6. Inmyopinion, the financial statementspresentfairly,inallmaterialrespects,thefinancialpositionof the Trade and Investment Limpopo as at 30 No-vember 2012, and its financial performance andcashflowsfortheeightmonthsthenended,inac-cordance with South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP)andtherequirementsofthePublicFinanceManagement Act of South Africa, 1999 (Act No. 1 of 1999)(PFMA).
Emphasisofmatters
7. I draw attention to the matter below. My opinion is notmodifiedinrespectofthismatter.
Goingconcern
8. A single entity called Limpopo Economic Devel-opmentAgency(LEDA)hasbeenestablishedwitheffect from 1 December 2012, pronounced by the Limpopo Executive Committee and gazetted, incor-porating the mandates of Limpopo Business Sup-portAgency (LIBSA), Trade and Investment Lim-popo (TIL), Limpopo Agribusiness DevelopmentCorporation (LADC) and Limpopo Economic De-
Trade and Investment Limpopo Annual Report March - November 2012 6968 Trade and Investment Limpopo Annual Report March - November 2012
REPORT ON THE FINANCIAL STATEMENTS
REPORT OF THE AUDITOR GENERAL
opment Enterprise (LimDev). The financial state-ments of TIL have been prepared for eight months on a going concern basis, prior to, and after amal-gamation.
Additionalmatters
9. I draw attention to the matters below. My opinion isnotmodifiedinrespectofthesematters.
Unauditedsupplementaryschedule
10. The supplementary information set out on page 105doesnotformpartof thefinancialstatementsand is presented as additional information. I have not audited this schedule and, accordingly, I do not express an opinion thereon.
REPORTONOTHERLEGALANDREGULATORYREQUIREMENTS
11. In accordance with the PAA and the General No-tice issued in terms thereof, I report the following findings relevant toperformanceagainstpredeter-mined objectives, compliance with laws and regula-tions and internal control, but not for the purpose of expressing an opinion.
Predeterminedobjectives
12. I performed procedures to obtain evidence about the usefulness and reliability of the informa-tion in the eight-month period performance report as set out on pages 18, 26 to 27, 33 to 34, 38 to 41, 44, 48 to 51 of the annual report.
13. The reported performance against predeter-mined objectives was evaluated against the overall criteria of usefulness and reliability. The usefulness of information in the eight months performance report relates to whether it is presented in accor-dance with the National Treasury’s annual reporting principles and whether the reported performance is consistent with the planned objectives. The useful-ness of information further relates to whether indica-torsand targetsaremeasurable (i.e.well-defined,verifiable, specific, measurable and time bound)and relevant as required by the National Treasury Framework for managing programme performance
information.The reliability of the information in respect of the selected programmes is assessed to determine whetheritadequatelyreflectsthefacts(i.e.whetheritisvalid,accurateandcomplete).
Usefulnessofinformation
14. The National Treasury Framework for managing programme performance information (FMPPI) re-quires that indicators should have clear unambigu-ousdatadefinitionssothatdataiscollectedconsis-tently and is easy to understand and use. A total of 62% of the measurable targets and indicators were not well defined, in that clear, unambiguous datadefinitionswerenotavailabletoallowfordatatobecollected consistently.
15. The National Treasury FMPPI requires that it must be possible to validate the processes and systems that produce the indicator. A total of 62% of the measurable targets and indicators were not verifiable in thatvalidprocessesandsystemsthatproduce the information on actual performance did not exist. This was due to the fact that management was aware of the requirements of the FMPPI, and although they did receive the necessary training, it was too late for them to implement application of the principles.
Reliabilityofinformation
16. The National Treasury FMPPI requires that insti-tutions should have appropriate systems to collect, collate, verify and store performance information to ensure valid, accurate and complete reporting of actual achievements against planned objectives, indicators and targets. The information presented with respect to the business services programme was not reliable when compared to the source infor-mation and evidence provided.
17. The National Treasury FMPPI requires that insti-tutions should have appropriate systems to collect, collate, verify and store performance information to ensure valid, accurate and complete reporting of actual achievements against planned objectives, in-dicators and targets. The reported performance infor-mation as a whole, of mining and the green economy
REPORT ON THE FINANCIAL STATEMENTS
REPORT OF THE AUDITOR GENERAL
are materially misstated due to the cumulative effect of numerous individually immaterial uncorrected mis-statements in the targets, relevant to the selected programme.
Additionalmatter
18. I draw attention to the following matter below. This matter does not have an impact on the prede-terminedobjectivesauditfindingsreportedabove.Idrawattentiontothefollowingmatterbelow:
Achievementofplannedtargets
19. Of the total number of 82 targets planned for the period ended 30 November 2012, 19 of the targets were not achieved during the period under review. This represents 23% of the total planned targets that were not achieved during the period under review.
Compliancewithlawsandregulations
20. I performed procedures to obtain evidence that the entity has complied with applicable laws and regulations regarding financial matters, financialmanagementandotherrelatedmatters.Myfindingsonmaterialnon-compliancewithspecificmattersinkey applicable laws and regulations as set out in the General Notice issued in terms of the PAA are as fol-lows:
Expendituremanagement
21. The accounting authority did not take effective steps to prevent irregular expenditure, as required by section51(1)(b)(ii)ofthePFMA.
Annualfinancialstatements
22.Thefinancial statementssubmitted forauditingwerepreparedinaccordancewiththeprescribedfi-nancial reporting framework and as required by sec-tion55(1)(b)ofthePFMA,however,misstatementsof revenue and disclosure items identified by theauditors in thesubmittedfinancialstatementsweresubsequently corrected.Procurementandcontractmanagement
23. Goods and services were procured without invit-
ing competitive bids, as required by Treasury Regu-lations 16A6.1. Deviations were approved by the accountingofficer,eventhoughitwasnotimpracti-cal to invite competitive bids. This was in contraven-tion of Treasury regulation 16A6.4.
Internalcontrol
24. I considered internal control relevant to my audit of the financial statements, the eightmonthperformance report and compliance with laws and regulations. The matters reported below under the fundamentals of internal control are limited to the significantdeficienciesthatresultedinthefindingson compliance with laws and regulations included in this report.
Leadership
25. The entity did not have sufficient monitoringcontrols in place to ensure that all targets set by the entity were achieved, and that incidences of irregu-lar expenditure were prevented.
Financialandperformancemanagement
26. Monitoring of performance against set tar-gets was not performed on a regular basis. In addition, management did not ensure that an adequate level of oversight and review was in placetoensurethatthefinancialstatementsandperformance reports presented for audit were in accordance with the accounting framework ap-plicable to the entity, and were free of misstate-ments as a whole, prior to being submitted to the auditors for audit purposes.
Polokwane28 March 2013
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Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Statement of Financial Position30 November 31 March
2012 2012Note(s) R R
Assets
Current Assets
Receivables from exchange transactions 8 262 178 822 184
Prepayments 6 577 841 194 671
Cash and cash equivalents 9 11 074 584 3 733 934
11 914 603 4 750 789
Non-Current Assets
Property, plant and equipment 3 2 987 558 3 296 180
Intangible assets 4 55 917 167 912
3 043 475 3 464 092
Total Assets 14 958 078 8 214 881
Liabilities
Current Liabilities
Trade and other payables 12 2 722 521 2 601 731
Provisions 11 - 2 369 422
2 722 521 4 971 153
Total Liabilities 2 722 521 4 971 153
Net Assets 12 235 557 3 243 728
Net Assets
Share capital / contributed capital 10 155 842 155 842
Accumulated surplus 12 079 715 3 087 886
Total Net Assets 12 235 557 3 243 728
12
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Statement of Financial Performance8 months 12 months
ending ending30 November 31 March
2012 2012Note(s) R R
Revenue 14 34 000 000 33 003 986
Other income 15 65 405 58 792
Operating expenses (23 105 851) (37 831 542)
Operating surplus (deficit) 10 959 554 (4 768 764)
Investment revenue 19 42 768 125 802
Interest costs 21 (135 096) (502 218)
Surplus (deficit) for the 8 months 10 867 226 (5 145 180)
13
STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL PERFORMANCE
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STATEMENT OF CHANGES
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Statement of Changes in Net AssetsShare capital /
contributedcapital
Accumulatedsurplus
Total netassets
R R R
Opening balance as previously reported 155 842 8 256 721 8 412 563AdjustmentsPrior period error - (23 655) (23 655)
Balance at 31/3/2011 as restated 155 842 8 233 066 8 388 908Changes in net assetsDeficit for the year - (5 145 180) (5 145 180)
Total changes - (5 145 180) (5 145 180)
Balance at 31/03/2012 155 842 3 087 886 3 243 728Changes in net assetsDeficit for the year - 10 867 226 10 867 226Transfer of surplus funds to LEDET in compliance with Section 53(3) of thePFMA
- (1 875 397) (1 875 397)
Total changes - 8 991 829 8 991 829
Balance at 30/11/2012 155 842 12 079 715 12 235 557
14
IN NET ASSETS
Cash Flow Statement
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Cash Flow Statement8 months 12 months
ending ending30 November 31 March
2012 2012Note(s) R R
Cash flows from operating activities
Receipts
Grants 15 34 000 000 32 000 000
Interest income 42 768 86 245
Dividends received - 39 557
Other receipts 65 405 69 597
34 108 173 32 195 399
Payments
Employee costs 17 (14 047 629) (19 183 478)
Suppliers (10 479 861) (14 700 694)
Interest costs (135 096) (502 218)
(24 662 586) (34 386 389)
Net cash flows from operating activities 23 9 445 587 (2 190 982)
Cash flows from investing activities
Purchase of property, plant and equipment 3 (115 527) (478 331)
Purchase of other intangible assets 4 (114 013) (169 310)
Surplus cash funds surrendered to LEDET 24 (1 875 397) -
Net cash flows from investing activities (2 104 937) (647 641)
Net increase/(decrease) in cash and cash equivalents 7 340 650 (2 838 623)
Cash and cash equivalents at the beginning of the year 3 733 934 6 572 557
Cash and cash equivalents at the end of the year 9 11 074 584 3 733 934
15
8monthsperiod
14
Surplus for the 8 months
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ACCOUNTING POLICIES ACCOUNTING POLICIES
1.PresentationofFinancialStatements
ThefinancialstatementshavebeenpreparedinaccordancewiththeStandardsofGenerallyRecognisedAccountingPractice(GRAP)includinganyinterpretations,guidelinesanddirectivesissuedbytheAccountingStandardsBoard.
Thesefinancialstatementshavebeenpreparedonanaccrualbasisofaccountingandareinaccordancewithhistoricalcostconventionunlessspecifiedotherwise.TheyarepresentedinSouthAfricanRand.
Asummaryofthesignificantaccountingpolicies,whichhavebeenconsistentlyapplied,aredisclosedbelow.
These accounting policies are consistent with the previous period.
1.1Significantjudgementsandsourcesofestimationuncertainty
In preparing the financial statements,management is required tomake estimates and assumptions that affect theamountsrepresentedinthefinancialstatementsandrelateddisclosures.Useofavailableinformationandtheapplica-tion of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates whichmaybematerialtothefinancialstatements.Significantjudgementsinclude:
Tradereceivablesandsundryreceivables
The entity assesses its trade receivables and sundry receivables for impairment at the end of each reporting period. In determiningwhetheranimpairmentlossshouldberecordedinsurplusordeficit,themanagementmakesjudgementsastowhetherthereisobservabledataindicatingameasurabledecreaseintheestimatedfuturecashflowsfromafi-nancial asset.
Fairvalueestimation
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values.
Provisions
Provisions were raised and management determined an estimate based on the information available. Additional disclo-sure of these estimates of provisions are included in note 11.
Taxation
NoprovisionhasbeenmadeforSAIncomeTaxation,astheentityisexemptfromincometaxationintermsofS10(1)(cA)(i)oftheIncomeTaxAct,1962.
Effectiveinterestrate
Theentityusedtheprimeinterestratetodiscountfuturecashflows.
Allowanceforimpairments
Ondebtorsanimpairmentlossisrecognisedinsurplusanddeficitwhenthereisobjectiveevidencethatitisimpaired.The impairment is measured as the difference between the debtors carrying amount and the present value of estimated futurecashflowsdiscountedattheeffectiveinterestrate,computedatinitialrecognition.
1.2Property,plantandequipment
Property,plantandequipmentaretangiblenon-currentassets(includinginfrastructureassets)thatareheldforuseinthe production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one period.
Thecostofanitemofproperty,plantandequipmentisrecognisedasanassetwhen:• itisprobablethatfutureeconomicbenefitsorservicepotentialassociatedwiththeitemwillflowtotheentity;and• the cost of the item can be measured reliably.
1.2Property,plantandequipment(continued)
Property, plant and equipment is initially measured at cost.
RecognitionandMeasurement
The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost.
Where an asset is acquired at no cost, or for a nominal cost, its cost is its fair value as at date of acquisition.
Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.
Property, plant and equipment is carried at cost, less accumulated depreciation and any impairment losses.
Property, plant and equipment are depreciated on the straight-line basis over their expected useful lives to their esti-mated residual value.
Theusefullivesofitemsofproperty,plantandequipmenthavebeenassessedasfollows:
Item AverageusefullifeLand indefiniteBuildings 60 yearsFurnitureandfixtures 10yearsMotor vehicles 5 yearsOfficeequipment 4-5yearsIT equipment 4 - 6 yearsElectrical equipment 4 - 10 yearsCommunication equipment 10 yearsSecurity equipment 6 years
Changeinaccountingestimate
The residual value, and the useful life and depreciation method of each asset are reviewed at the end of each reporting date. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.
Reviewing the useful life of an asset on an annual basis does not require the entity to amend the previous estimate un-less expectations differ from the previous estimate.
Eachpartofanitemofproperty,plantandequipmentwithacostthatissignificantinrelationtothetotalcostoftheitemis depreciated separately.
Thedepreciationchargeforeachperiodisrecognisedinsurplusordeficit,unlessitisincludedinthecarryingamountof another asset.
Items of property, plant and equipment are derecognised when the asset is disposed of, or when there are no further economicbenefitsorservicepotentialexpectedfromtheuseoftheasset.
Thegainorlossarisingfromthederecognitionofanitemofproperty,plantandequipmentisincludedinsurplusordeficitwhen the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equip-ment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.
1.3Intangibleassets
Anassetisidentifiedasanintangibleassetwhenit:• is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, either
individually or together with a related contract, assets or liability; or• arises from contractual rights or other legal rights, regardless whether those rights are transferable or separate from
the entity or from other rights and obligations.
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ACCOUNTING POLICIES ACCOUNTING POLICIES
1.3Intangibleassets(continued)
Anintangibleassetisrecognisedwhen:• itisprobablethattheexpectedfutureeconomicbenefitsorservicepotentialthatareattributabletotheassetwill
flowtotheentity;and• the cost or fair value of the asset can be measured reliably.
Intangible assets are initially recognised at cost.
An intangible asset acquired at no or nominal cost, the cost shall be its fair value as at the date of acquisition.
The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.
Reassessingtheusefullifeofanintangibleassetwithafiniteusefullife,afteritwasclassifiedasindefinite,isanindica-tor that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.
Amortisationisprovidedtowritedowntheintangibleassets,onastraight-linebasis,totheirresidualvaluesasfollows:
Item UsefullifeComputer software, other 2 years
Intangibleassetsarederecognised:• on disposal; or• whennofutureeconomicbenefitsorservicepotentialareexpectedfromitsuseordisposal.
The gain or loss is the difference between the net disposal proceeds, if any, and the carrying amount. It is recognised in surplusordeficitwhentheassetisderecognised.
1.4Leases
Aleaseisclassifiedasafinanceleaseifittransferssubstantiallyalltherisksandrewardsincidentaltoownership.Aleaseisclassifiedasanoperatingleaseifitdoesnottransfersubstantiallyalltherisksandrewardsincidentaltoowner-ship.
Whenaleaseincludesbothlandandbuildingselements,theentityassessestheclassificationofeachelementsepa-rately.
Operatingleases–lessee
Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability.
1.5Sharecapital/contributedcapital
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
1.6Provisionsandcontingencies
Provisionsarerecognisedwhen:• the entity has a present obligation as a result of a past event;• itisprobablethatanoutflowofresourcesembodyingeconomicbenefitsorservicepotentialwillberequiredtosettle
the obligation; and• a reliable estimate can be made of the obligation.
The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.
Where the effect of time-value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation.
1.6Provisionsandcontingencies(continued)
Where some, or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision.
Provisionsarereviewedateachreportingdateandadjustedtoreflectthecurrentbestestimate.Provisionsarereversedifitisnolongerprobablethatanoutflowofresourcesembodyingeconomicbenefitsorservicepotentialwillberequired,to settle the obligation.
A provision is used only for expenditures for which the provision was originally recognised.
Contingent assets and contingent liabilities are not recognised.
1.7Investmentincome
Investment income is recognised on a time-proportion basis using the effective interest method.
1.8Comparativefigures
Wherenecessary,comparativefigureshavebeenreclassifiedtoconformtochangesinpresentationinthecurrent8months.
1.9Unauthorisedexpenditure
Unauthorisedexpendituremeans:• overspending of a vote or a main division within a vote; and• expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in accordance with
the purpose of the main division.
Allexpenditurerelatingtounauthorisedexpenditureisrecognisedasanexpenseinthestatementoffinancialperfor-manceintheeightmonthsthattheexpenditurewasincurred.Theexpenditureisclassifiedinaccordancewiththenatureoftheexpense,andwhererecovered,itissubsequentlyaccountedforasrevenueinthestatementoffinancialperformance.
1.10Fruitlessandwastefulexpenditure
Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised.
Allexpenditurerelatingtofruitlessandwastefulexpenditureisrecognisedasanexpenseinthestatementoffinancialperfor-manceintheeightmonthsthattheexpenditurewasincurred.Theexpenditureisclassifiedinaccordancewiththenatureoftheexpense,andwhererecovered,itissubsequentlyaccountedforasrevenueinthestatementoffinancialperformance.
1.11Irregularexpenditure
Irregularexpenditureasdefinedinsection1ofthePFMAisexpenditureotherthanunauthorisedexpenditure,incurredin contravention of or that is not in accordance with a requirement of any applicable legislation, including - (a)thisAct;or (b)theStateTenderBoardAct,1968(ActNo.86of1968),oranyregulationsmadeintermsoftheAct;or (c)anyprovinciallegislationprovidingforprocurementproceduresinthatprovincialgovernment.
NationalTreasurypracticenoteno.4of2008/2009whichwasissuedintermsofsections76(1)to76(4)ofthePFMArequiresthefollowing(effectivefrom1April2008):
Irregularexpenditurethatwasincurredandidentifiedduringthecurrentfinancialperiodandwhichwascondonedbeforetheendoftheeightmonthsfinancialperiodand/orbeforefinalisationofthefinancialstatementsmustalsoberecordedappropriately in the irregular expenditure register. In such an instance, no further action is also required with the excep-tionofupdatingthenotetothefinancialstatements.
Irregularexpenditurethatwasincurredandidentifiedduringthecurrentfinancialperiodandforwhichcondonementisbeing awaited at period end must be recorded in the irregular expenditure register. No further action is required with the exceptionofupdatingthenotetothefinancialstatements.
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ACCOUNTING POLICIES ACCOUNTING POLICIES
1.11Irregularexpenditure(continued)
Whereirregularexpenditurewasincurredinthepreviousfinancialyearandisonlycondonedinthefollowingfinancialperiod,theregisterandthedisclosurenotetothefinancialstatementsmustbeupdatedwiththeamountcondoned.
Irregularexpenditurethatwasincurredandidentifiedduringthecurrentfinancialyearandwhichwasnotcondonedbythe National Treasury or the relevant authority must be recorded appropriately in the irregular expenditure register. If liability for the irregular expenditure can be attributed to a person, a debt account must be created if such a person is liable in law. Immediate steps must thereafter be taken to recover the amount from the person concerned. If recovery is notpossible,theaccountingofficeroraccountingauthoritymaywriteofftheamountasdebtimpairmentanddisclosesuchintherelevantnotetothefinancialstatements.Theirregularexpenditureregistermustalsobeupdatedaccord-ingly. If the irregular expenditure has not been condoned and no person is liable in law, the expenditure related thereto mustremainagainsttherelevantprogramme/expenditureitem,bedisclosedassuchinthenotetothefinancialstate-ments and updated accordingly in the irregular expenditure register.
1.12Budgetinformation
Trade and Investment Limpopo is typically subject to budgetary limits in the form of appropriations or budget authorisa-tions(orequivalent),whichisgiveneffectthroughauthorisinglegislation,appropriationorsimilar.
GeneralpurposefinancialreportingbyTradeandInvestmentLimpoposhallprovideinformationonwhetherresourceswere obtained and used in accordance with the legally-adopted budget.
Thefinancialstatementsandthebudgetareonthesamebasisofaccountingthereforeacomparisonwiththebudgetedamountsforthereportingperiodhavebeenincludedinthefinancialstatements.
Thefinancialstatementsandthebudgetarenotonthesamebasisofaccounting,thereforeareconciliationbetweenthestatementoffinancialperformanceandthebudgethavebeenincludedinthefinancialstatements.Refertonotes36 to 39 and 40.
1.13Relatedparties
The entity operates in an economic sector currently dominated by entities directly or indirectly owned by the South Af-rican Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the provincial sphere of government are considered to be related parties.
Management are those persons responsible for planning, directing and controlling the activities of the entity, including those charged with the governance of the entity in accordance with legislation, in instances where they are required to perform such functions.
Relatedpartiesareidentifiedasapartywhichhastheabilitytocontroltheotherpartyorexercisesignificantinfluenceovertheotherpartyinmakingfinancialandoperatingdecisionsoriftherelatedpartyentityandanotherentityaresub-ject to common control.
Closemembersofthefamilyofapersonareconsideredtobethosefamilymemberswhomaybeexpectedtoinfluence,orbeinfluencedby,thatmanagementintheirdealingswiththeentity.
Only transactions with related parties, not at arm’s length or not in the ordinary course of business, are disclosed.
1.14FinancialInstruments
Theentityclassifiesfinancialinstruments,ortheircomponentparts,oninitialrecognitionasafinancialasset,afinancialliability or an equity instrument in accordance with the substance of the contractual arrangement.
InitialRecognitionandMeasurement
Financial instruments are recognised initially when the entity becomes a party to the contractual provisions of the instruments.
Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not de-terminable,whicharemeasuredatcostandareclassifiedasavailable-for-salefinancialassets.
Forfinancialinstrumentswhicharenotatfairvaluethroughsurplusordeficit,transactioncostsareincludedintheinitialmeasurement of the instrument.
1.14FinancialInstruments(continued)
TheEffectiveInterestRateMethod
Theeffectiveinterestratemethodisamethodofcalculatingtheamortisedcostofafinancialassetorafinancialliabilityand of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate thatexactlydiscountsestimatedfuturecashpaymentsorreceiptsthroughtheexpectedlifeofthefinancialinstrumentor,whenappropriate,ashorterperiod,tothenetcarryingamountofthefinancialassetorfinancialliability.
Amortisedcost
Amortisedcostistheamountatwhichthefinancialassetorfinancialliabilityismeasuredatinitialrecognitionminusprincipal repayments, plus or minus the cumulative amortisation, using the effective interest rate method of any differ-ence between the initial amount and the maturity amount, and minus any reduction for impairment or uncollectability.
Loansandotherreceivables
Loans and receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recog-nisedinsurplusordeficitwhenthereisobjectiveevidencethattheasset is impaired.Significantfinancialdifficultiesofthedebtor,probabilitythatthedebtorwillenterbankruptcyorfinancialreorganisation,anddefaultordelinquencyinpayments are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the differencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedattheeffective interest rate, computed at initial recognition.
Tradeandotherpayables
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.
Cashandcashequivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments thatarereadilyconvertibletoaknownamountofcashandaresubjecttoaninsignificantriskofchangesinvalue.Theseare initially and subsequently recorded at fair value.
1.15Revenuefromexchangetransactions
Revenueisthegrossinflowofeconomicbenefitsorservicepotentialduringthereportingperiodwhenthoseinflowsresult in an increase in net assets, other than increases relating to contributions from owners.
An exchange transaction is one in which the entity receives assets or services, or has liabilities extinguished, and directly givesapproximatelyequalvalue(primarilyintheformofgoods,servicesoruseofassets)totheotherpartyinexchange.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
Measurement
Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.
Renderingofservices
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcomeofatransactioncanbeestimatedreliablywhenallthefollowingconditionsaresatisfiedthat: - the amount of revenue can be measured reliably; - it is probable that the economic benefits or service potential associated with the transaction will flow to the entity; - the stage of completion of the transaction at the reporting date can be measured reliably, and the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.
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ACCOUNTING POLICIES ACCOUNTING POLICIES
1.16Revenuefromnon-exchangetransactions
Revenue from non-exchange transactions arises when an entity receives value from another entity without directly giving approximately equal value in exchange. An asset acquired through a non-exchange transaction shall initially be measured at its fair value as at the date of acquisition.
This revenue will be measured at the amount of increase in net assets recognised by the entity.
Aninflowofresourcesfromanon-exchangetransaction,recognisedasanasset,shallberecognisedasrevenue,ex-cepttotheextentthataliabilityisrecognisedforthesameinflow.Asanentitysatisfiesapresentobligationrecognised,asaliability,inrespectofaninflowofresourcesfromanon-exchangetransaction,recognisedasanasset,itwillreducethe carrying amount of the liability recognised as an amount equal to that reduction.
Resources transferred could be subject to certain conditions. Conditions specify that the entity must use the resources transferred to it in a particular way, or the resources must be returned to the transferrer which therefore gives rise to a present obligation. In assessing whether or not conditions exist, the entity considers the terms of each non-exchange transaction.The entity also evaluates the substance, other than the legal form of the arrangement.
Stipulations on transferred assets are terms in law or regulation, or a binding arrangement, imposed upon the use of a transferred asset by entities external to the reporting entity.
Liabilitiesarepresentobligationsthatresultintheoutflowofresourcesfromtheentity.
Totheextentthatnoobligationexists,orasandwhentheconditionsoftheobligationaresatisfied,theentityrecognisesrevenue. Where no obligation exists, revenue is recognised at the fair value of the assets recognised. When a condition exists, revenue is recognised as the amount of the reduction in the liability.
Measurement
Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the entity.
When, as a result of a non-exchange transaction, the entity recognises an asset, it also recognises revenue equivalent to the amount of the asset measured at its fair value as at date of acquisition, unless it is also required to recognise a liability. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settle the obligation at the reporting date, and the amount of the increase in net assets, if any, recognised as revenue. Whenaliabilityissubsequentlyreduced,becausethetaxableeventoccurs,oraconditionissatisfied,theamountofthereduction in the liability is recognised as revenue.
1.17Financialriskmanagement
Treasury regulations require the entity to facilitate a risk assessment to determine the material risks to which the entity may be exposed and to evaluate the strategy for managing these risks. A risk assessment exercise is therefore con-ducted for the whole organisation on an annual basis; with the assistance of the entity’s internal auditors. These risk factorsformthebasisoftheinternalauditcoverageplan.Theuseoffinancialinstrumentsexposesanorganisationtoa number of risks.Themainfinancialrisksaredisclosedinnote30.
1.18AccumulatedSurplus
Section53(3)ofPublicFinanceManagementAct,prescribesthatanentityshallatcloseofitsfinancialperiodpaythesurplus cash funds to the Provincial Revenue Fund unless treasury approval has been obtained to retain such funds.
1.19Employeebenefits
Employeebenefitsareallformsofconsiderationgivenbyanentityinexchangeforservicerenderedbyemployees.
Short-termemployeebenefits
Short-termemployeebenefitsareemployeebenefits (other than terminationbenefits) thataredue tobe settledwithintwelve months after the end of the period in which the employees render the related service.Short-termemployeebenefitsincludeitemssuchas:• wages, salaries and social security contributions;• short-termcompensatedabsences(suchaspaidannualleaveandpaidsickleave)wherethecompensationforthe
absences is due to be settled within twelve months after the end of the reporting period in which the employees render the related employee service ,and
• bonus, incentive and performance related payments payable within twelve months after the end of the reporting period in which the employees render the related service.
When an employee has rendered service to the entity during a reporting period, the entity recognises the undiscounted amountofshort-termemployeebenefitsexpectedtobepaidinexchangeforthatservice:• asaliability(accruedexpense),afterdeductinganyamountalreadypaid.Iftheamountalreadypaidexceedstheundis-
countedamountofthebenefits,theentityrecognisesthatexcessasanasset(prepaidexpense)totheextentthattheprepayment will lead to, for example, a reduction in future payments or a cash refund, and
• asanexpense,unlessanotherstandardrequiresorpermitstheinclusionofthebenefitsinthecostofanasset.
The expected cost of compensated absences is recognised as an expense, as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The entity measures the ex-pected cost of accumulating compensated absences as the additional amount that the entity expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The entity recognises the expected cost of bonus, incentive and performance related payments when the entity has a pres-ent legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the entity has no realistic alternative but to make the payments.
Post-employmentbenefits:definedcontributionplans
Definedcontributionplansarepost-employmentbenefitplans,whereanentitypaysfixedcontributionsintoaseparateentity(afund)andwillhavenolegalorconstructiveobligationtopayfurthercontributionsifthefunddoesnotholdsufficientassetstopayallemployeebenefitsrelatingtoemployeeserviceinthecurrentandpriorperiods.
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NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
2.Newstandardsandinterpretations(continued)
GRAP23:Revenuefromnon-exchangetransactions
Revenue from non-exchange transactions arises when an entity receives value from another entity without directly giving approximately equal value in exchange. An asset acquired through a non-exchange transaction shall initially be measured at its fair value as at the date of acquisition.
This revenue will be measured at the amount of increase in net assets recognised by the entity.
Aninflowofresourcesfromanon-exchangetransactionrecognisedasanasset,shallberecognisedasrevenue,excepttotheextentthataliabilityisrecognisedforthesameinflow.Asanentitysatisfiesapresentobligationrecognisedasaliabilityinrespectofaninflowofresourcesfromanon-exchangetransactionrecognisedasanasset, itwillreducethecarryingamount of the liability recognised as an amount equal to that reduction.
This standard has been approved by the board but its effective date has not yet been determined by the Minister of Finance. The effective date indicated is a provisional date and could change depending on the decision of the Minister of Finance.
The effective date of the standard is for years beginning on or after 1 April 2012.
Theentityonlyadoptedthestandardforthefirsttimeinthe2012financialstatements.
Itisunlikelythatthestandardwillhaveamaterialimpactontheentity’sfinancialstatements.
GRAP24:PresentationofbudgetInformationinthefinancialstatements
Subject to the requirements of paragraph 19 of GRAP 24, an entity shall present a comparison of the budget amounts for whichitisheldpubliclyaccountableandactualamountseitherasaseparateadditionalfinancialstatementorasadditionalbudgetcolumnsinthefinancialstatementscurrentlypresentedinaccordancewithstandardsofGRAP.Thecomparisonofbudgetandactualamountsshallpresentseparatelyforeachleveloflegislativeoversight:• theapprovedandfinalbudgetamounts;• the actual amounts on a comparable basis; and• by way of note disclosure, an explanation of material differences between the budget for which the entity is held publicly
accountable and actual amounts, unless such explanation is included in other public documents issued in conjunction withthefinancialstatements,andacrossreferencetothosedocumentsismadeinthenotes.
Whereanentityprepares itsbudgetandfinancialstatementsonacomparablebasis, it includes thecomparisonasanadditionalcolumnintheprimaryfinancialstatements.Wherethebudgetandfinancialstatementsarenotpreparedonacomparablebasis,aseparatestatementispreparedcalledthe‘StatementofComparisonofBudgetandActualAmounts’.Thisstatementcomparesthebudgetamountswiththeamountsinthefinancialstatementsadjustedtobecomparabletothe budget.
Acomparablebasismeansthatthebudgetandfinancialstatements:• are prepared using the same basis of accounting i.e. either cash or accrual;• include the same activities and entities;• usethesameclassificationsystem;and• are prepared for the same period.
This standard has been approved by the board but its effective date has not yet been determined by the Minister of Finance. The effective date indicated is a provisional date and could change depending on the decision of the Minister of Finance.
The effective date of the standard is for years beginning on or after 1 April 2012.
Theentityonlyadoptedthestandardforthefirsttimeinthe2012financialstatements.
Itisunlikelythatthestandardwillhaveamaterialimpactontheentity’sfinancialstatements
2.Newstandardsandinterpretations(continued)
GRAP23:Revenuefromnon-exchangetransactions
Revenue from non-exchange transactions arises when an entity receives value from another entity without directly giving approximately equal value in exchange. An asset acquired through a non-exchange transaction shall initially be measured at its fair value as at the date of acquisition.
This revenue will be measured at the amount of increase in net assets recognised by the entity.
Aninflowofresourcesfromanon-exchangetransactionrecognisedasanasset,shallberecognisedasrevenue,excepttotheextentthataliabilityisrecognisedforthesameinflow.Asanentitysatisfiesapresentobligationrecognisedasaliabilityinrespectofaninflowofresourcesfromanon-exchangetransactionrecognisedasanasset, itwillreducethecarryingamount of the liability recognised as an amount equal to that reduction.
This standard has been approved by the board but its effective date has not yet been determined by the Minister of Finance. The effective date indicated is a provisional date and could change depending on the decision of the Minister of Finance.
The effective date of the standard is for years beginning on or after 1 April 2012.
Theentityonlyadoptedthestandardforthefirsttimeinthe2012financialstatements.
Itisunlikelythatthestandardwillhaveamaterialimpactontheentity’sfinancialstatements.
GRAP24:PresentationofbudgetInformationinthefinancialstatements
Subject to the requirements of paragraph 19 of GRAP 24, an entity shall present a comparison of the budget amounts for whichitisheldpubliclyaccountableandactualamountseitherasaseparateadditionalfinancialstatementorasadditionalbudgetcolumnsinthefinancialstatementscurrentlypresentedinaccordancewithstandardsofGRAP.Thecomparisonofbudgetandactualamountsshallpresentseparatelyforeachleveloflegislativeoversight:• theapprovedandfinalbudgetamounts;• the actual amounts on a comparable basis; and• by way of note disclosure, an explanation of material differences between the budget for which the entity is held publicly
accountable and actual amounts, unless such explanation is included in other public documents issued in conjunction withthefinancialstatements,andacrossreferencetothosedocumentsismadeinthenotes.
Whereanentityprepares itsbudgetandfinancialstatementsonacomparablebasis, it includes thecomparisonasanadditionalcolumnintheprimaryfinancialstatements.Wherethebudgetandfinancialstatementsarenotpreparedonacomparablebasis,aseparatestatementispreparedcalledthe‘StatementofComparisonofBudgetandActualAmounts’.Thisstatementcomparesthebudgetamountswiththeamountsinthefinancialstatementsadjustedtobecomparabletothe budget.
Acomparablebasismeansthatthebudgetandfinancialstatements:• are prepared using the same basis of accounting i.e. either cash or accrual;• include the same activities and entities;• usethesameclassificationsystem;and• are prepared for the same period.
This standard has been approved by the board but its effective date has not yet been determined by the Minister of Finance. The effective date indicated is a provisional date and could change depending on the decision of the Minister of Finance.
The effective date of the standard is for years beginning on or after 1 April 2012.
Theentityonlyadoptedthestandardforthefirsttimeinthe2012financialstatements.
Itisunlikelythatthestandardwillhaveamaterialimpactontheentity’sfinancialstatements
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3. Property, plant and equipment
30 Nov 2012 31 Mar 2012
Cost /Valuation
Accumulateddepreciation
andaccumulatedimpairment
Carrying value Cost /Valuation
Accumulateddepreciation
andaccumulatedimpairment
Carrying value
Land 952 000 - 952 000 952 000 - 952 000Buildings 1 081 932 (210 272) 871 660 1 081 932 (198 249) 883 683Furniture and fixtures 1 024 110 (843 731) 180 379 923 863 (643 253) 280 610Motor vehicles 1 258 785 (848 020) 410 765 1 258 785 (765 697) 493 088Office equipment 580 506 (287 787) 292 719 505 108 (201 543) 303 565IT equipment 970 470 (690 435) 280 035 942 690 (559 456) 383 234Leasehold improvements 60 823 (60 823) - 60 823 (60 823) -
Total 5 928 626 (2 941 068) 2 987 558 5 725 201 (2 429 021) 3 296 180
Reconciliation of property, plant and equipment - Nov 2012
Openingbalance
Additions Disposals Depreciation Total
Land 952 000 - - - 952 000Buildings 883 683 - - (12 023) 871 660Furniture and fixtures 280 610 5 080 (1 852) (103 459) 180 379Motor vehicles 493 088 - - (82 323) 410 765Office equipment 303 565 73 180 648 (84 674) 292 719IT equipment 383 234 37 267 (3 450) (137 016) 280 035
3 296 180 115 527 (4 654) (419 495) 2 987 558
Reconciliation of property, plant and equipment - March 2012
Openingbalance
Additions Disposals Transfers Depreciation Total
Land 952 000 - - - - 952 000Buildings 901 716 - - - (18 033) 883 683Furniture and fixtures 417 085 123 637 (18 219) (154 588) (87 305) 280 610Motor vehicles 616 573 - - - (123 485) 493 088Office equipment - 213 941 (2 141) 154 588 (62 823) 303 565IT equipment 457 477 140 753 (18 718) - (196 278) 383 234
3 344 851 478 331 (39 078) - (487 924) 3 296 180
Land is situated at Erf 5724 in Polokwane.
A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available forinspection at the registered office of the entity.
The residual values and useful lifes of PPE were reviewed and possible impairment has been assessed at the reportingdate. The results are included in the relevant notes.
26
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
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4. Intangible assets
30 Nov2012
31 Mar2012
Cost /Valuation
Accumulatedamortisation
andaccumulatedimpairment
Carrying value Cost /Valuation
Accumulatedamortisation
andaccumulatedimpairment
Carrying value
Computer software, other 435 918 (380 001) 55 917 321 904 (153 992) 167 912
Reconciliation of intangible assets - Nov 2012
Openingbalance
Additions Amortisation Impairmentloss
Total
Computer software, other 167 912 114 013 (68 228) (157 780) 55 917
Reconciliation of intangible assets - March 2012
Openingbalance
Additions Transfers Other changes,movements
Amortisation Total
Computer software, other 8 423 169 310 (8 445) 8 445 (9 821) 167 912
The residual values and useful lifes of Intangible assets were reviewed and possible impairment has been assessed atthe reporting date. The results are included in the relevant notes.
5. Financial assets by category
The accounting policies for financial instruments have been applied to the line items below:
30 November 2012
Loans andreceivables
Total
Trade and other receivables 262 178 262 178Cash and cash equivalents 11 074 584 11 074 584Prepayments 577 841 577 841
11 914 603 11 914 603
31 March 2012
Loans andreceivables
Total
Trade and other receivables 822 184 822 184Cash and cash equivalents 3 733 934 3 733 934Prepayments 194 671 194 671
4 750 789 4 750 789
27
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
lives
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6. Prepayments
Travelling and accomodation costs paid in advance 437 069 194 671Renewal of memberships and subscriptions 140 772 -
577 841 194 671
7. Investment
UnlistedZebediela Mining (Proprietary) Limited
Opening balance - 20Movement - (20)
- -
Zebediela Mining (Pty) Ltd bank account was closed on the 7th of September 2011 and dividendswere distributed to shareholders. The shares are in the process of being tranferred to CorridorMining Resources (CMR), fully owned subsidiary of LEDA. TIL received a dividend of R39 556.97.
8. Receivables from exchange transactions
Employee costs in advance 203 703 111 805Sundry receivables 33 302 658 563Deposits 101 673 101 645Provision for impairment of trade and other receivables (76 500) (49 829)
262 178 822 184
Fair value of trade and other receivables
The carrying value less impairment provision of trade receivables and payables are assumed toapproximate their fair value.
Trade and other receivables impaired
As at 30/11/2012, trade and other receivables of R 76 500 (2012: R 49 829) were impaired andprovided for.
The amount of the provision was R (76 500) as at 30/11/2012 (2012: R (49 829)).
The ageing of these outstanding amounts is as follows:
3 to 6 months - -Over 6 months 76 500 49 829
Reconciliation of provision for impairment of trade and other receivables
Opening balance (49 829) (163 826)Provision for impairment (26 671) -Amounts written off as uncollectible - 113 997
(76 500) (49 829)
The maximum exposure to credit risk at the reporting date is the fair value of each class of loanmentioned above. The entity does not hold any collateral as security.
28
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
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9. Cash and cash equivalents
Cash and cash equivalents consist of:
Cash on hand 1 000 1 000Bank balances 11 073 584 3 732 934
11 074 584 3 733 934
Cash and cash equivalents held by the entity that are not available for use by theeconomic entity
- 30 000
Credit quality of cash at bank and short term deposits, excluding cash on hand
The credit quality of cash at bank and short term deposits, excluding cash on hand that areneither past due nor impaired can be assessed by reference to external credit ratings(if available) or historical information about counterparty default rates:
10. Share capital / contributed capital
Authorised155 842 Ordinary shares of R1 each 155 842 155 842
Reconciliation of number of shares issued:Reported as at 01/04/2012 155 842 155 842
IssuedOrdinary 155 842 155 842
29
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
is assumed to
Trade and Investment Limpopo Annual Report March - November 2012 8988 Trade and Investment Limpopo Annual Report March - November 2012
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11. Provisions
Reconciliation of provisions - 30 November 2012
OpeningBalance
Utilised duringthe year
Total
Legal proceedings 2 369 422 (2 369 422) -
Reconciliation of provisions - 31 March 2012
OpeningBalance
Additions Total
Legal proceedings - 2 369 422 2 369 422
Legal proceedings provisions
The legal claims represent the following cases: Mapatha J vs. Trade and Investment Limpopo for severance settlement upon
termination of his contract of employment (PY: R2 242 789)
Bopape P vs. Trade and Investment Limpopo for unfair labour practice to non-payment of benefits of performance (PY: R51 010)
Khonou E vs. Trade and Investment Limpopo for unfair labour practice tonon-payment of benefits of performance (PY: R75 623)
12. Trade and other payables
Trade payables 1 205 167 1 134 510Third Party Payables 1 517 354 1 467 221
2 722 521 2 601 731
Fair value of trade and other payables
Trade payables 2 722 521 2 601 731Provision for legal claims - 2 369 422
2 722 521 4 971 153
The fair values are identical to the carrying amount reflected in the statement of financial position
30
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
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Notes to the Financial StatementsNovember
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13. Financial liabilities by category
The accounting policies for financial instruments have been applied to the line items below:
30 November 2012
Financialliabilities at
amortised cost
Total
Trade and other payables 2 722 521 2 722 521
2012
Financialliabilities at
amortised cost
Total
Provision for legal claims 2 369 422 2 369 422Trade and other payables 2 601 731 2 601 731
4 971 153 4 971 153
14. Revenue
Rendering of services - 1 003 986Government grants received 34 000 000 32 000 000
34 000 000 33 003 986
15. Other income
Debt impairment recovered 65 405 58 792
16. General expenses
Bank charges 26 937 65 704Cleaning 76 320 13 121Entertainment - 1 112Fines and penalties - 56 202Gifts - 4 799Insurance 87 561 186 422Motor vehicle expenses 99 757 165 734Recruitment costs and placement fees - 520 609Printing and stationery 67 846 177 879Protective clothing 4 047 10 993Security costs 128 310 192 593Subscriptions and membership fees 7 654 34 755Travel - local 96 769 62 113Repairs and maintenance buildings 120 863 145 782Strategic Planning - 38 300Office refreshments 33 034 139 352
749 098 1 815 470
31
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
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Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
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17. Employee related costs
Basic 6 037 770 8 870 244Performance bonus 843 608 778 464Medical aid - company contributions 653 332 939 344UIF 36 850 55 614Group life contributions 288 707 429 161Leave pay provision charge 432 775 167 698Pension fund contributions 1 245 529 1 792 802Overtime payments 11 623 28 75613th Cheques 538 231 720 611Acting allowances 88 155 82 135Car allowance 1 139 264 1 762 417Housing benefits and allowances 2 758 023 3 261 413Termination benefits - 1 782 349
14 073 867 20 671 008
Remuneration of executive director
Remuneration (8 months) 770 389 1 103 726Performance Bonuses 82 620 -Retirement fund contribution 105 048 183 289Medical aid conribution 28 651 40 514Contributions to Group Life and UIF 30 445 -
Total 1 017 153 1 327 529
Remuneration of non executive directors
Annual Remuneration 333 333 500 000Other expenses 70 982 -
404 315 500 000
18. Debt impairment
Debts impaired 50 100 2 286
19. Investment revenue
Dividend revenueUnlisted financial assets - Local - 39 557
Interest revenueBank 42 768 86 245
42 768 125 802
20. Impairment of assets
Intangible assets
Computer software was impaired to facilitate the move to a new accounting system.
157 780 -
32
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
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21. Interest costs
Interest paid on legal claims 135 096 502 218
22. Auditors' remuneration
Fees 1 010 576 1 319 192
23. Cash generated from (used in) operations
Surplus (deficit) 10 867 226 (5 145 180)
Adjustments for:
Depreciation and amortisation 487 723 497 745(Surplus)/Deficit on sale of assets and liabilities 4 654 39 071Impairment deficit on computer software 157 780 -Debt impairment 50 100 2 286Movements in provisions (2 369 422) 2 369 422
Changes in working capital:
Receivables from exchange transactions 560 006 953Debtors (50 100) (2 286)Prepayments (383 170) 47 007Trade and other payables 120 790 -
9 445 587 (2 190 982)
24. Cash surplus as at 31 March 2012
Accumulated cash surplus funds surrendered to LEDET as required by section 53(3)1 of thePFMA amounting to R 1 875 397
33
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
contributioncontribution
Remuneration of executive director
Remuneration of non executive directors
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Notes to the Financial StatementsNovember
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25. Commitments
Authorised capital expenditure
Not yet contracted for and authorised by members
Property, plant and equipment 100 -
This committed expenditure relates to IT equipment and will be financed by availableexisting cash resources.
Operating leases - as lessee (expense)
Minimum lease payments due - within one year 594 184 598 234 - in second to fifth year inclusive 410 164 798 748
1 004 348 1 396 982
Operating lease payments represent rentals payable by the entity for certain of its office properties and office equipment.Leases are negotiated for an average term of seven years and rentals are fixed for an average of three years. Nocontingent rent is payable.
Office space leased by Trade and Investment Limpopo from AC & GJ Diamond :
Second floor Biccard Street. This contract has been extended up to 31 March 2013 and the lease payment is fixed at R17 849.20 per month with an escalation of 10% per annum, (VAT inclusive).
First floor Biccard Street for a period of three (3) years ending 28 February 2015. The lease payment is fixed atR21 340.80 per month with an escalation of 10% per annum, (VAT inclusive).
Johannesburg Offices
Trade and Investment Limpopo leases office space from Liberty Properties for a period of three (3) years ending 31October 2013. The lease payment is fixed at R20 804.20 per month, with an escalation of 9% per annum,(VAT inclusive). The leases have varying terms, escalation clauses and renewal rights.
Trade and Investment Limpopo leases the following office equipment:
A photo copier machine from Nashua for a period of three (3) years ending 31 January 2015, for the Biccard Street officein Polokwane. The lease payment is fixed at R2 133.62 per month, (VAT inclusive).
Two photo copier machines from Konica Minolta for Marshal Street and Biccard Street offices respectively. The leasepayment is fixed at R11 388.28 per month for both machines (VAT inclusive) and has been extended up to 31 March 2013.
A photo copier machine from Konica Minolta for a period of three (3) years ending 30 July 2013 for the Johannesburgoffice. The lease payment is fixed at R2 673.64 per month, (VAT inclusive).
34
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
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26. Related parties
`
Relationships
Accounting authority Directors (Refer to Accounting Authority's report item7)
Controlling entity Limpopo Department of Economic Development,Environment and Tourism
Shareholder with significant influence Office of the Premier
Fellow state owned entity Limpopo Economic Development Enterprises(LIMDEV)
Members of key management Executive management (Refer to note 27)
Related party balances
Amounts included in Trade receivable (Trade Payable) regarding related partiesMD Monakedi 15 301 -PJ Moloisane 11 040 -NT Mohlele 9 533 -A Shiburi 10 898 -LD Madlala 4 933 -
Amounts included included in Trade and sundry payables LIMDEV (Board fees) (333 333) (500 000)
Related party transactions
Grant received from related partiesLEDET 34 000 000 32 000 000
Purchases from (sales to) related partiesPreparations for board meetings and accomodation 70 982 -
Sponsorship received Office of the Premier sponsorship for the Gala Dinner - 332 376
Contribution towards the amalgamation costsLEDET - 50 000
Board fees paidLIMDEV 333 333 500 000
Accumulated Surplus Cash surrenderedLEDET 1 875 397 -
Key management information
Class Description NumberNon-executive directors MembersExecutive board member Chief Executive OfficerExecutive management General Managers
35
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
inTradeandsundrypayables
Trade and Investment Limpopo Annual Report March - November 2012 9594 Trade and Investment Limpopo Annual Report March - November 2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
27. Members' and executive management emoluments
Emoluments were paid by LIMDEV. An amount of R333 333 due to LIMDEV is included in trade and other payables. (Refer to note 12)
Executive member and executive managers
30 November 2012
Emoluments Other benefits* Pension paidor receivable
Actingallowance
Performancerelated
payments
Total
M.D. Monakedi 770 389 59 096 105 048 - 82 620 1 017 153S. Rakumako 491 392 60 636 57 776 - 45 441 655 245A. Shiburi 466 261 78 738 71 273 4 387 37 621 658 280M. Shogole (Resigned 08/12) 356 375 34 632 49 351 - 35 329 475 687C. Mokoma 484 889 63 965 62 149 8 316 48 880 668 199P.J. Moloisane 515 215 56 781 59 068 - 48 884 679 948L.D. Madlala 527 771 29 803 52 524 - 55 091 665 189T. Mohlele 460 329 28 733 34 588 58 577 26 822 609 049N. Kekana (appointedNovember 2012)
77 500 2 817 9 604 - - 89 921
4 150 121 415 201 501 381 71 280 380 688 5 518 671
31 March 2012
Emoluments Other benefits* Pension paidor receivable
ActingAllowance
Performancerelated
payments
Total
MD Monakedi 1 103 727 79 055 144 748 - - 1 327 530S Rakumako 706 924 83 416 79 611 - 46 954 916 905A Shiburi 682 552 100 251 97 921 - 57 483 938 207M Shogole 728 050 59 166 92 880 - 54 779 934 875C Mokoma 719 411 84 802 72 215 48 000 39 840 964 268PJ Moloisane 742 289 77 933 85 554 - 49 799 955 575LD Madlala 753 539 41 057 72 374 - - 866 970T Mohlele 53 942 3 286 4 041 7 322 - 68 591EK Mahoai 351 436 12 251 43 793 - - 407 480
5 841 870 541 217 693 137 55 322 248 855 7 380 401
* Other benefits comprise group life, UIF and medical contributions
Non-executive
30 November 2012
Members' fees Otherexpenses
Total
Directors 333 333 70 982 404 315
31 March 2012
Members' fees TotalDirectors 500 000 500 000
36
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
28. Prior period errors and re-statement of opening balances
Property, Plant and Equipment were depreciated at the tax rates in the prior years and the useful lives and residual valueswere not appropriately considered. Errors identified were rectified retrospectively in the prior year and comparative figuresrestated.
The correction of the error(s) results in adjustments as follows.
Statement of financial positionProperty, plant and equipment - 154 307Intangible asset - (20 804)Trade and other payables - (118 450)Accounts receivable - (14 675)Opening Accumulated Surplus or Deficit - 378
Statement of Financial PerformanceDepreciation and amortisation - 150 465Rental of property and utilities - (129 209)Promotional expenses - 1 364Travelling expenses - (14 400)Consultation costs - 9 120Administration costs - (16 962)
Cash flow statement
Cash flow from operating activitiesPayments to suppliers - (150 087)
29. Comparative figures
The current reporting period is shorter than a year (8 months), due to amalgamation of TIL into LEDA thereforecomparative amounts for Statement of Financial Performance, Statement of Change in Net Assets, Cash Flow Statementand related notes are not comparable to the current balances.
30. Risk management
Capital risk management
The entity's objectives when managing capital are to safeguard the entity's ability to continue as a going concern in orderto provide returns for owner and benefits for other stakeholders and to maintain an optimal capital structure to reduce thecost of capital.
There are no externally imposed capital requirements.
There have been no changes to what the entity manages as capital, the strategy for capital maintenance or externallyimposed capital requirements from the previous year.
Financial risk management
The entity’s activities expose it to a variety of financial risks: market risk (including fair value interest rate risk, cash flowinterest rate risk and price risk), credit risk and liquidity risk.
37
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment Limpopo Annual Report March - November 2012 9796 Trade and Investment Limpopo Annual Report March - November 2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
30. Risk management (continued)
Liquidity risk
The entity’s risk to liquidity is a result of the funds available to cover future commitments.The entity manages liquidity riskthrough an ongoing review of future commitments and credit facilities.
Cash is managed prudently by keeping sufficient cash in bank accounts. Cash is mainly received from Governmentfunding. Where there are delays in receipt of the grants, an overdraft facility is sought with the bank.
The following are the contractual maturities of financial liabilities, including estimated interest payments, and excludingthe impact of netting arrangements:
As at 30/11/2012 Less than 1year
Between 1 &2 years
Between 2 &5 years
Over 5 years
Trade and other payables 1 398 570 1 323 951 - -
As at 31/03/2012 Less than 1year
Between 1& 2years
Between 2 & 5years
Over 5 years
Trade and other payables 1 693 359 908 372 - -Provision for legal claims 2 369 422 - - -
Interest rate risk
As the entity has no significant interest-bearing assets, the entity's income and operating cash flows are substantiallyindependent of changes in market interest rates.
The entity generally adopts a policy ensuring that its exposure to changes in interest rate is on a floating rate basis.
The entity does not use any financial instruments as hedges against interest rate risk.
Cash flow interest rate risk
`
Financial instrument Due in lessthan a year
Due in one totwo years
Due in two tothree years
Due in three tofour years
Due after fiveyears
Trade and other receivables - normal creditterms
840 019 - - - -
Cash in current banking institutions 11 074 584 - - - -Trade and other payables - extended creditterms
1 398 570 1 323 951 - - -
Fair value interest rate risk
`
Financial instrument Due in lessthan a year
Due in one totwo years
Due in two tothree years
Due in three tofour years
Due after fiveyears
Trade and other receivables 840 019 - - - -Cash and cash equivalents 11 074 584 - - - -Trade and other payables 1 398 570 1 323 951 - - -
38
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
30. Risk management (continued)
Credit risk
Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. The entity onlydeposits cash with major banks with high quality credit standing and limits exposure to any onecounter-party.
Trade receivables comprise a widespread of both customer and employee base. Managementevaluated credit risk relating to customers and employees on an ongoing basis. Individual risklimits are set based on internal ratings in accordance with limits set by management. Theutilisation of credit limits is regularly monitored. Loans and advances to staff are settled in cashor by applying monthly salary deductions.
Financial assets exposed to credit risk at 8 months end were as follows:
`
Financial instrumentPrepayments 577 841 194 671Staff study loans 6 682 11 822Advances: subsistence and travelling and other 197 021 99 983Sundry receivables 134 975 760 208
31. Going concern
As at 30/11/2012, the entity accumulated a surplus of R 12 079 715 and the entity's total assets exceeded its liabilities byR 12 235 557.
The financial statements have been prepared on the basis of accounting policies applicable to a going concern. Thisbasis presumes that funds will be available to finance future operations and that the realisation of assets and settlementof liabilities, contingent obligations and commitments will occur in the ordinary course of business.
This has been done due to the fact that Trade and Investment Limpopo as a seperate legal entity ceases to exist on 1December 2012, but the mandate of TIL will continue in Limpopo Economic Development Agency (LEDA).
The ability of the entity to continue as a going concern is dependent on a number of factors. The most significant of theseis that Limpopo Economic Development Agency (LEDA) will continue to procure funding for the ongoing operations for theentity.
32. Events after the reporting date
After the reporting date, the current interim board of directors was dissolved and a new board appointed with effect from 1January 2013. (refer to Accounting Authority's report item 7)
A single economic development agency for the Limpopo Province (LEDA) was established with effect from 1 December2012.
33. Unauthorised expenditure
No unauthorised expenditure was incurred during the eight month period ended 30 November 2012.
39
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment Limpopo Annual Report March - November 2012 9998 Trade and Investment Limpopo Annual Report March - November 2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
34. Fruitless and wasteful expenditure
Opening balance 2 275 789 76 810Add: Fruitless and wasteful expenditure - prior year 224 948 2 339 624Add: Fruitless and wasteful expenditure - current year 135 012 -Less: Amounts condoned (2 635 749) (137 645)Less: Amounts recoverable (not condoned) - (3 000)
- 2 275 789
The fruitless and wasteful expenditure was condoned by the Accounting Authority.An amount of R33 302 is being recovered from the responsible staff members.
The entity keeps a register of fruitless and wasteful expenditure
35. Irregular expenditure
Opening balance 11 826 777 11 826 777Add: Irregular Expenditure - prior year 3 042 689 -Add: Irregular Expenditure - current year 942 274 -Less: Amounts condoned (15 068 494) -
743 246 11 826 777
Analysis of expenditure awaiting condonation per age classification
Current year: 3 to 6 months 719 669 -Current year: above 6 months 15 752 -Prior year: 8 to 12 months 7 825 -
743 246 -
Details of irregular expenditure – current yearDisciplinary steps taken/criminal proceedings
Purchase orders raised in retrospect andmotivations for deviations submitted andapproved
None 133 233
No purchase orders raised, motivations fordeviations submitted and approved
None 65 795
No purchase orders raised, purchase ordersraised in retrospect and no motivations fordeviations submitted
None 8 425
Quotations accepted without declaration ofinterests
None 86 265
Competitive bidding process not followed forfeasibility studies for processing of Aloe andAgave plants in Limpopo. Motivations fordeviation were submitted and approved
None 441 180
Competitive bidding process not followed for theappointment of consultants to assist if finance.Motivation for deviation was submitted andapproved
None 207 376
942 274
40
NOTES TO FINANCIAL STATEMENTS
FOR THE 8 MONTHS ENDED 30/11/2012Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
35. Irregular expenditure (continued)
Details of irregular expenditure condonedCondoned by (condoning authority)
Purchase orders raised in retrospect andmotivations for deviations submitted andapproved
Board of Directors 133 233
No purchase orders raised, motivations fordeviations submitted and approved
Board of Directors 65 795
Competitive bid procedures not followed fortransactions above R500 000
Board of Directors 11 877 265
Awards without declaration of interest Board of Directors 171 000
Awards without tax clearance certificates anddeclaration of interest
Board of Directors 604 147
Awards without tax clearance certificate Board of Directors 70 531
At least three quotations not obtained anddeviation not approved
Board of Directors 32 910
Invoice paid against open ended purchaseorders without details of supportingdocumentation
Board of Directors 1 512 471
Invoices paid without purchase orders Board of Directors 329 713
Invoices charged twice on different dates for thesame service and with the same purchase orderreference
Board of Directors 271 429
15 068 494
36. Reconciliation between budget and statement of financial performance
Reconciliation of budget deficit with the surplus/deficit in the statement of financial performance:
Net surplus (deficit) per the statement of financial performance 10 867 226 (5 145 180)Adjusted for:Other income and finance income over recovered (98 173) (205 204)Operating expenditure under incurred (30 330) 730 193Grant received in advance (11 333 333) -
Net deficit per approved budget (594 610) (4 620 191)
41
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
in
Trade and Investment Limpopo Annual Report March - November 2012 101100 Trade and Investment Limpopo Annual Report March - November 2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
37. Reconciliation between budget and cash flow statement
Reconciliation of budget surplus/deficit with the net cash generated from operating, investing and financing activities:
Operating activitiesActual amount as presented in the budget statement (2 472 365) (1 675 078)Basis differences (36 923) (1 290 197)Timing differences 11 954 875 774 293
Net cash flows from operating activities 9 445 587 (2 190 982)
Investing activitiesActual amount as presented in the budget statement (279 100) (650 000)Basis differences (1 875 397) -Timing differences 49 560 2 359
Net cash flows from investing activities (2 104 937) (647 641)
Net cash generated from operating, investing and financing activities 7 340 650 (2 838 623)
38. Actual operating expenditure versus budgeted operating expenditure
Operating expenditure (under) and over incurred as at 30 November 2012 (30 330) 730 193
39. Actual capital expenditure versus budgeted capital expenditure
Capital expenditure unspent as at 30 November 2012 (49 560) (2 359)
Refer to note 41 for the comparison of actual capital expenditure versus budgeted expenditure.
40. Deviation from supply chain management regulations
Paragraph 12(1)(d)(i) of Government gazette No. 27636 issued on 30 May 2005 states that a supply chain managementpolicy must provide for the procurement of goods and services by way of a competitive bidding process.
Paragraph 36 of the same gazette states that the accounting officer may dispense with the official procurement process incertain circumstances, provided that he records the reasons for any deviations and reports them to the next meeting of theaccounting authority and includes a note to the financial statements.
42
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
41. Statement of comparative and actual information
30 November 2012
Originalbudget
Final budget Actualoutcome
Variance Actualoutcome as %of final budget
Financial Performance
Finance revenue - 10 000 10 000 42 768 (32 768) %428Transfers recognised - operational - 22 666 667 22 666 667 34 000 000 (11 333 333) %150Other own revenue - - - 65 405 (65 405) %-
Total revenue (excluding capitaltransfers and contributions)
- 22 676 667 22 676 667 34 108 173 (11 431 506) %150
Employee costs - (14 008 308) (14 008 308) (14 073 869) 65 561 %100Accounting Authority emoluments - (333 333) (333 333) (404 316) 70 983 %121Debt impairment - - - (50 100) 50 100 %-Depreciation and asset impairment - (491 667) (491 667) (645 503) 153 836 %131Finance charges - - - (135 096) 135 096 %-Other expenditure - (8 437 969) (8 437 969) (7 932 063) (505 906) %94
Total expenditure - (23 271 277) (23 271 277) (23 240 947) (30 330) %100
Surplus/(Deficit) for the year - (594 610) (594 610) 10 867 226 (11 461 836) %(1 828)
Originalbudget
Final budget Actualoutcome
Variance Actualoutcome as %of final budget
Capital expenditure and funds sourcesSources of capital fundsTransfers recognised - capital - 279 100 279 100 229 540 49 560 %82
Cash flows
Net cash from (used) operating - (2 472 365) (2 472 365) 9 445 587 (11 917 952) %(382)Net cash from (used) investing - (279 100) (279 100) (2 104 937) 1 825 837 %754
Net increase/(decrease) in cashand cash equivalents
- (2 751 465) (2 751 465) 7 340 650 (10 092 115) %(267)
Cash and cash equivalents at thebeginning of the 8 months
- 3 733 934 3 733 934 3 733 934 - %100
Cash and cash equivalents at 8months end
- 982 469 982 469 11 074 584 (10 092 115) %1 127
43
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment Limpopo Annual Report March - November 2012 103102 Trade and Investment Limpopo Annual Report March - November 2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
37. Reconciliation between budget and cash flow statement
Reconciliation of budget surplus/deficit with the net cash generated from operating, investing and financing activities:
Operating activitiesActual amount as presented in the budget statement (2 472 365) (1 675 078)Basis differences (36 923) (1 290 197)Timing differences 11 954 875 774 293
Net cash flows from operating activities 9 445 587 (2 190 982)
Investing activitiesActual amount as presented in the budget statement (279 100) (650 000)Basis differences (1 875 397) -Timing differences 49 560 2 359
Net cash flows from investing activities (2 104 937) (647 641)
Net cash generated from operating, investing and financing activities 7 340 650 (2 838 623)
38. Actual operating expenditure versus budgeted operating expenditure
Operating expenditure (under) and over incurred as at 30 November 2012 (30 330) 730 193
39. Actual capital expenditure versus budgeted capital expenditure
Capital expenditure unspent as at 30 November 2012 (49 560) (2 359)
Refer to note 41 for the comparison of actual capital expenditure versus budgeted expenditure.
40. Deviation from supply chain management regulations
Paragraph 12(1)(d)(i) of Government gazette No. 27636 issued on 30 May 2005 states that a supply chain managementpolicy must provide for the procurement of goods and services by way of a competitive bidding process.
Paragraph 36 of the same gazette states that the accounting officer may dispense with the official procurement process incertain circumstances, provided that he records the reasons for any deviations and reports them to the next meeting of theaccounting authority and includes a note to the financial statements.
42
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
41. Statement of comparative and actual information
30 November 2012
Originalbudget
Final budget Actualoutcome
Variance Actualoutcome as %of final budget
Financial Performance
Finance revenue - 10 000 10 000 42 768 (32 768) %428Transfers recognised - operational - 22 666 667 22 666 667 34 000 000 (11 333 333) %150Other own revenue - - - 65 405 (65 405) %-
Total revenue (excluding capitaltransfers and contributions)
- 22 676 667 22 676 667 34 108 173 (11 431 506) %150
Employee costs - (14 008 308) (14 008 308) (14 073 869) 65 561 %100Accounting Authority emoluments - (333 333) (333 333) (404 316) 70 983 %121Debt impairment - - - (50 100) 50 100 %-Depreciation and asset impairment - (491 667) (491 667) (645 503) 153 836 %131Finance charges - - - (135 096) 135 096 %-Other expenditure - (8 437 969) (8 437 969) (7 932 063) (505 906) %94
Total expenditure - (23 271 277) (23 271 277) (23 240 947) (30 330) %100
Surplus/(Deficit) for the year - (594 610) (594 610) 10 867 226 (11 461 836) %(1 828)
Originalbudget
Final budget Actualoutcome
Variance Actualoutcome as %of final budget
Capital expenditure and funds sourcesSources of capital fundsTransfers recognised - capital - 279 100 279 100 229 540 49 560 %82
Cash flows
Net cash from (used) operating - (2 472 365) (2 472 365) 9 445 587 (11 917 952) %(382)Net cash from (used) investing - (279 100) (279 100) (2 104 937) 1 825 837 %754
Net increase/(decrease) in cashand cash equivalents
- (2 751 465) (2 751 465) 7 340 650 (10 092 115) %(267)
Cash and cash equivalents at thebeginning of the 8 months
- 3 733 934 3 733 934 3 733 934 - %100
Cash and cash equivalents at 8months end
- 982 469 982 469 11 074 584 (10 092 115) %1 127
43
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Trade and Investment Limpopo Annual Report March - November 2012 105104 Trade and Investment Limpopo Annual Report March - November 2012
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Notes to the Financial StatementsNovember
2012March2012
R R
41. Statement of comparative and actual information (continued)
Explanatory notes of material differences
Depreciation, armotisation and impairment of intangible assets overspent by R153 836 due to theimpairment of Pastel Evolution accounting software to facilitate the move to a new accounting system.
Finance charges overspent by R135 096 due to the additional interest charged on legal claims.
Other expenditure underspent by R505 906 due to the timing differences in costs incurred within the BusinessRetention Services, Mining and Green Economy, Research and Knowledge Management, Strategic Planning,Regional Economic Integration and Smart Partnership divisions.
Consulting and professional fees overspent by R186 617 due to the late appointment of consultants whoassisted with the verification of assets in 2011/2012 financial year. Funds not utilised at year-end weresurrendered to Treasury.
44
NOTES TO FINANCIAL STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
DETAILED INCOME STATEMENTSFOR THE 8 MONTHS ENDED 30/11/2012
Thesupplementaryinformationdoesnotformpartofthefinancialstatementsandisunaudited.
Trade and Investment LimpopoFinancial Statements for the 8 months ended 30/11/2012
Detailed Income statement8 months 12 months
ending ending30 November 31 March
2012 2012Note(s) R R
Revenue
Rendering of services - 1 003 986
Government grants 34 000 000 32 000 000
Recoveries 65 405 58 792
Interest received - investment 19 42 768 86 245
Dividends received 19 - 39 557
Total Revenue 34 108 173 33 188 580
Expenditure
Personnel 17 (14 073 869) (20 671 007)
Accounting Authority Emoluments (404 316) (500 000)
Rental of property and utilities (807 797) (947 137)
Rental of office equipment and usage (227 248) (242 286)
Depreciation and amortisation (487 723) (497 745)
Impairment loss/ Reversal of impairments 20 (157 780) -
Finance costs 21 (135 096) (502 218)
Debt impairment 18 (50 100) (2 286)
Communication costs (441 948) (909 007)
Staff training and development costs (56 378) (391 829)
Consulting and professional fees (2 095 077) (3 211 292)
Computer related costs (288 705) (355 239)
Strategic planning (332 052) (461 446)
Investment Tracking (53 270) -
Loss on disposal of assets (4 654) (39 071)
Other Administration Expenses 16 (749 098) (1 815 470)
Regional Economic Integration (25 970) -
Stakeholder and Smart Partnerships (26 187) (524 671)
Corporate Marketing expenses (207 790) (511 314)
Corporate Communications expenses (143 981) (1 169 194)
Agriculture expenses (595 772) (1 428 910)
Tourism expenses (423 707) (783 195)
Mining expenses (354 671) (1 389 413)
Green Economy expenses (128 563) (21 660)
Client Relationship Management & Municipal capacity building (126 280) (452 830)
Business Services (134 284) (108 758)
Information sharing and Knowledge Management (196 215) (1 397 782)
Cluster Analysis (512 416) -
Total Expenditure (23 240 947) (38 333 760)
Deficit for the year 10 867 226 (5 145 180)
45The supplementary information presented does not form part of the financial statements and is unaudited
Surplus(Deficit)fortheyear
106 Trade and Investment Limpopo Annual Report March - November 2012
CORPORATE INFORMATION
JOHANNESBURG
SecondfloorSandtonOfficeTowersSandton City ComplexCnr 5th Street & Rivonia RoadSandton 2196JohannesburgSouth Africa
Tel:+27(011)0269576Fax:+27(011)7834076
HEADOFFICE
130A Marshall StreetPolokwaneLimpopo ProvinceSouth Africa0700
PO Box 3490PolokwaneLimpopo ProvinceSouth Africa0700
Tel:+27(0)152955171Fax:+27(0)152955137